Victoria land registry down to two bidders as CK Infra pulls out

The competition for Victoria’s land registry business is down to two bidders after CK Infrastructure pulled out of the race to focus on its proposed acquisition of Australian energy giant APA Group, sister publication Infrastructure Investor has learnt.

The two bidders left in the race are a joint bid from superfunds Cbus and First State Super, and another from Macquarie Infrastructure and Real Assets in partnership with Sunsuper.

CK Infrastructure was the third shortlisted bidder, but has withdrawn its interest as it faces a potentially arduous regulatory battle over its A$13 billion ($9.8 billion; €8.3 billion) bid for APA, a source told Infrastructure Investor.

Part of both remaining bidders for the land titles business already have interests in equivalent businesses in other states. First State Super, in partnership with Hastings Funds Management, was the successful bidder for the New South Wales government land registry business last April for A$2.6 billion. MIRA partnered with Canada’s PSP to win the South Australia land registry for A$1.6 billion in August 2017.

Victoria’s land registry is expected to cost the winning bidder around A$2 billion, much less than the A$13 billion CK Infrastructure proposes to spend on APA.

A CKI-led consortium, which includes CK Asset Holdings and Power Assets Holdings, offered A$11 per share for APA Group on Wednesday. The deal will be subject to approval by both the Foreign Investment Review Board and the Australian Competition and Consumer Commission due to CK Infrastructure’s existing substantial holdings in Australia’s energy infrastructure.

CK Infrastructure has proposed a divestment package which would include APA’s interests in the Goldfields Gas Pipeline, Parmelia Gas Pipeline and Mondarra Gas Storage Facility, located in Western Australia, as well as a standalone management team.

Market sources have expressed doubts to Infrastructure Investor about whether this proposal will be sufficient to clear regulatory hurdles, setting the scene for a long negotiation and review process.

CK Infrastructure had not responded to a request for comment at the time of publication.