Ausnet Services Ltd (ASX: AST) share price is up in early trade as the company agrees to terms set out in an offer from Brookfield Asset Management to acquire all of its outstanding shares.
Ausnet confirmed the offer values its shares at $2.65 each, a step up from Brookfield's previous offer of $2.50 around a month ago.
At the time of writing, Ausnet shares are trading for $2.57 apiece, up 4.05% on their opening price.
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What did Ausnet announce today?
Ausnet's announcement notes that it agreed to the terms set out in Brookfield's proposal and has subsequently entered into a scheme implementation deed.
Brookfield is representing a consortium of investors including Sunsuper Superannuation Fund, Alberta Investment Management Corporation, and two large institutional investors from Ontario, Canada.
Back in September, Brookfield first made its proposal when it offered $2.50 per Ausnet share to acquire the company. At the time, this represented a 26% premium to Ausnet's share price of $1.98.
The revised offer now puts Brookfield at an enterprise value of $17.8 billion, equating to $2.65 per share for its available equity.
As such, the offer is roughly a 7% premium to Ausnet's closing price on Friday and a 34% bump on when it first received the offer on 20 September.
As an additional sweetener, if the scheme is implemented after March next year, Ausnet shareholders will get "an additional consideration from Brookfield of $0.000260274 per share for each day after 31 March 2022" that it is not implemented.
One large Ausnet shareholder, Singapore Power – which owns 32.74% of Ausnet's shares – is in support of the proposal and intends to vote in favour, according to the announcement.
Curiously, one caveat in Brookfield's offer is that Ausnet must cease all discussions with all other competing parties.
Consequently, it has terminated its due diligence process with APA Group (ASX: APA) after APA had offered a cash and scrip deal on a valuation of $2.60 per Ausnet share in a competing bid last month.
Although, Ausnet did state that "if APA wishes to make a further proposal, (it is) free to do so, as is any other party".
The company needs to tread carefully, however, as it will be "required to pay Brookfield a break fee of $101,674,267 (or 1% of its equity value) if the Ausnet board ultimately recommends a competing, superior proposal".
Speaking on the announcement, Ausnet chair Peter Mason said:
For the last several weeks the Board has been extremely focused on ensuring a competitive process. This has resulted in a binding proposal from Brookfield at a price that provides full value to all AusNet shareholders. The binding proposal, secured at a significant premium to where the share price was trading prior to the first of the six proposals being received, deserves to be put before our shareholders for their consideration.
What's next for the Ausnet share price?
Shareholders can expect to receive the scheme booklet before the end of March 2022 when they will vote on the scheme.
Given that Singapore Power and its board have already pushed to approve, many are curious to see the outcome from the company's remaining shareholders.
It's been a year of outsized returns for Ausnet after the onset of this acquisition saga. The Ausnet share price has gained 41% since January 1, extending its return in the last 12 months to 23.5%.
