Meet the three corporate heavies asked to decide AusNet M&A battle

Anthony Macdonald, Yolanda Redrup and Kanika Sood

Oct 4, 2021 – 9.33pm

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The gloves are off in the $17 billion battle for AusNet Services and who better to referee it than the Kasparov of Australian M&A tactics, Ron Malek.

Malek, co-chairman at Luminis Partners, has been drafted in to rule on the bitter battle for AusNet, which has Australian gas pipeline owner APA Group up against Canadian heavyweight Brookfield Infrastructure in a $17 billion bidding war.

M&A banker Ron Malek is on a rare fourth stint at the Takeovers Panel. Ben Rushton

Malek, a career banker known for M&A strategy, is one of three Takeovers Panel members understood to have been asked to help decide AusNet’s fate.

The three-person AusNet panel’s other members include top-notch company director Yasmin Allen, who sits on boards at ASX Ltd, Cochlear and Santos, and erudite Victorian QC Michael Borsky, fresh from representing Crown Resorts at the Finkelstein Royal Commission

It’s a heavyweight panel for a heavyweight matter, and one that could well make a landmark ruling for Australian M&A.

APA Group has asked the panel to quash an agreement between target AusNet and rival suitor Brookfield, which gives the Canadian an eight-week exclusive look at AusNet’s books and clear headstart in the takeover battle.

Yasmin Allen’s on the boards of ASX Ltd, Cochlear and Santos.

Importantly, the exclusivity agreement does not contain an optional “fiduciary out” clause, which would allow AusNet to allow a rival suitor into the data room if it lobbed a superior bid. It’s unchartered waters in Australian M&A.

APA Group claims it has done that, slapping down a $2.60 a share cash and scrip offer almost as soon as it found out about Brookfield’s $2.50 all cash proposal.

APA Group has asked the panel to help get it in the data room and make AusNet a fair(er) fight. It wants the exclusivity agreement abolished, subject to a fiduciary out or, at the least, shortened.

Brookfield hit back with its own Takeovers Panel application on Monday. It took exception to APA Group repeatedly calling its cash and scrip proposal $2.60 a security, when recent trading has it worth less, and “superior”. Sources said it also wanted APA Group to acknowledge regulatory risks associated with its offer, specifically in terms of the ACCC, rather than just talk up it status as a FIRB cleanskin.

The Takeovers Panel, a revered institution in Australian takeovers, operates under strict confidentiality requirements. It is clearly looking into APA Group’s application, lobbed on September 23, and has asked Malek, Allen and Borksy to decide on its behalf.

Michael Borsky QC represented Crown Resorts at the Victorian Royal Commission.

Sources said APA and AusNet were still providing information to the newly formed trio, which makes it sound like there’s no decision imminent.

In the meantime, Brookfield’s alone in the dataroom.

It’s well and truly popcorn time for bankers, lawyers and the whole dealmaker set in Australia. AusNet’s takeover involves a cast of big name bidders and advisers. There are reputations and a critical piece of Australian infrastructure on the line.