CHANG PISTILLI & Simmons and Blake Dawson Waldron advised on the separation of APA Group from Alinta, which resolves several legal actions between the two organisations.
Alinta will now distribute its 35 per cent security holding in APA Group among its shareholders on a pro rata basis. This will go to the new owners of Alinta if the planned acquisition of the company by Babcock & Brown/Singapore Power International is agreed to by Alinta shareholders at a meeting in August. If it is not agreed to, Alinta will distribute the shares via an institutional share sale by 14 December 2007.
Alinta owns 150.7 million APA securities at an average entry price of $4.39.
The separation will include termination or transfer of the Pipeline Management Agreement under which an Alinta subsidiary maintains some APA Group pipelines, including the Moomba to Sydney Pipeline.
APA will pay Alinta approximately $210 million, although the final value will be contingent on the outcome of Babcocks’ proposed acquisition of Alinta, with an expected profit to Alinta of about $40 million.
Overall, Alinta’s acting CEO Peter Magarry said in a statement the deal was likely to “result in a net positive profit” for the company.
CP&S was involved in several deals connected with APA and Alinta. Blake Dawson Waldron partner Marie McDonald acted for Alinta.
CP&S advised APA on the negotiated separation, with Mark Pistilli and Richard Graham among those advising on the sale of the pipeline operation and maintenance contracts.
“Along with APA’s recent acquisition of Origin Energy’s asset management business, this transaction will serve to enhance APA’s operating resources,” said Mark Pistilli.
Diana Chang, head of CP&S’s dispute resolution group, and senior associate Amelia Kelly acted for APA Group on the legal proceedings.
Litigation included Alinta’s application for special leave to appeal to the High Court over its acquisition of securities in APA last year.
Alinta said its acquisition was lawful, but it was in the best interests of shareholders to reach this agreement.
Alinta also terminated a proceeding against Australian Pipeline Ltd and some of its directors in connection with the issue of 5 million shares by APL to Australian Pipeline Trust.
CP&S partner Jason Mendens has also been advising Babcock & Brown in it’s acquisition of Alinta.