Bidding War Sparks over Hastings Diversified

Hastings Diversified received a ‘cast-and-scrip’ offer from the APA Group. This came when the Australian Competition and Consumer Commission gave the go-signal for the hedge fund to bid on the company.

The estimated value of Hastings Diversified was pegged at $2.10 per share last year.

The APA’s offer, however, was lower than the bid offered by Pipeline Partners Australia. The latter offered a $2.35.5 per share. Pipeline Partners Australia’s total bid is $123 billion.

A bidding war between APA and Pipeline Partners ensued because of this, raising Hasting Diversified’s shares during the close of business yesterday to a new high at $2.485 or about six percent of its capital.

The ACCC said it allowed APA to make an offer if the company let’s go of the Moomba-Adelaide pipeline, which analysts project to be at $400 million to $550 million.

Analysts are also expecting APA to raise its bid to up to $2.50 to $2.60 next, while Pipeline can go as far as $2.45. The offer is expected to come next week.

There are concerns, however, of overpaying, considering APA’s shares went down yesterday, as the market has its worries over the company’s cash flow and dividends.