CP2 Ltd has agreed to buy the rest of transport infrastructure developer ConnectEast Group for a deal worth A$2.17 billion ($2.4 billion), Bloomberg reported.
The shareholders should accept the cash offer of 55 Australian cents a share unless there’s a higher bid.
The offer from Horizon Roads, an investment vehicle managed by CP2, is 22% higher .
CP2 owns 35% of ConnectEast.
The takeover would hand CP2, which manages about A$2 billion in funds, ownership of the EastLink toll road in Melbourne after the fund manager’s offer for rival highway operator Transurban Group was rejected in May last year.
As per analysts at Commonwealth Bank of Australia, today’s agreement may trigger a counterbid.
CP2 managing director Syd Bone said, “Connect East is a good asset for patient, long-term investors.”
He added, “From a customer, management and employee perspective, the operations of EastLink will be business as usual.”
To fund the offer, the Australian infrastructure fund manager CP2 has raised A$1.4 billion from its investor group, which includes National Pension Service of Korea and Teachers Insurance and Annunity Association of America.
The shareholders who don’t accept the cash offer from Horizon Roads may opt for securities in an unlisted registered management investment plan, allowing them to keep an indirect investment in ConnectEast, Melbourne-based ConnectEast said.