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HK's Li Ka-shing wins $2B battle for Envestra

The logo for Cheung Kong is displayed atop the Cheung Kong Center in Hong Kong, China.
Jerome Favre | Bloomberg | Getty Images
The logo for Cheung Kong is displayed atop the Cheung Kong Center in Hong Kong, China.

Hong Kong tycoon Li Ka-shing's Cheung Kong Group will secure its A$2.2 billion ($2.06 billion) takeover of Australian gas pipeline company Envestra after rival APA Group said it would accept the offer.

APA, which holds a third of Envestra shares and had also bid for the company, said it would sell into the offer just one day before it was due to expire, realizing an estimated pre-tax profit of A$430 million or more than double its initial outlay.

"The cash offer put forward by the consortium well exceeded our valuation of the Envestra business, even at full ownership," APA's managing director Mick McCormack said in a statement.

A consortium led by Cheung Kong Infrastructure Holdings, part of the Cheung Kong Group, made an offer amounting to A$1.32 per Envestra share, valuing APA's 33 percent stake at A$784 million. The offer was a 3.1 percent premium to Envestra's closing price on Wednesday.

Read MoreHong Kong to launch gateway to China stock market

APA's capitulation ends months of uncertainty about Envestra's ownership, after talks hit a snag in May over a dividend payment dispute. It also ends speculation APA may launch a last-minute counter-offer.

"We think it's a good outcome... it now gives certainty", Macquarie Bank analyst Ian Myles said.

"The defeating condition has now been met at 50.1 (percent) and they said yesterday that all other defeating commissions would be removed if they achieved this one."

Envestra shares climbed three percent to the takeover price of A$1.32 by 0124 GMT. APA added 0.4 percent in a weaker overall market.

In Hong Kong, CKI shares fell 1.6 percent in a lower overall market.

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