Australia’s biggest gas pipeline company, APA Group, has resumed its search for a U.S. acquisition, after putting the move on hold last year while it dealt with a takeover offer, its CEO said Feb. 20.
APA Managing Director Mick McCormack said the company, which has a market value of A$11 billion (US$7.9 billion), had identified a few opportunities to potentially acquire a U.S. gas transmission or distribution business.
“We want to buy something that’s meaningful, worth the effort, diversifies our assets geographically, but not so big that it would cause indigestion to APA,” McCormack told Reuters in an interview.
“We’re not going to go over there and buy something for a couple hundred million [Australian dollars],” he said.
“But ... we’re not going to go over there and buy something for A$10 billion, because that’s not the idea either. We’re not trying to transform into a U.S. company,” he continued.
The U.S. regulatory environment and the dynamics of the nation’s gas market, where output has rocketed with the rapid growth of production from shale, appeal to APA, the firm’s strategy and development chief, Ross Gersbach, told analysts on a conference call.
McCormack, who has built APA over the past 14 years through a string of acquisitions to own A$20 billion worth of pipelines and power assets, said he couldn't predict whether the company would be able to seal a U.S. deal before he retires later this year.
APA last year agreed to a A$13 billion takeover offer at A$11 a share from Hong Kong-based CK Group, but the deal was blocked by the Australian government on national interest grounds, amid concern about foreign ownership of the country’s biggest gas transporter.
APA’s shares rose 0.7% on Feb. 20 to A$9.47 after the company reported a 4.3% rise in EBITDA to A$788 million. The broader Australian market was down around 0.2%.
APA said it expected full-year EBITDA to land within the upper-end of its forecast range of A$1.55 million to A$1.575 million. (US$1 = A$1.3953)
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