Hastings Diversified Utilities Fund : APA: Intention to increase APA's takeover offer for HDF

ASX RELEASE 25 July 2012
The Manager
ASX Market Announcements
Australian Securities Exchange
4th Floor, 20 Bridge Street
Sydney NSW 2000

Electronic Lodgement

Dear Sir or Madam

Company Announcement

I attach the following announcement for release to the market:

• Intention to increase APA's takeover offer for HDF Yours sincerely

Mark Knapman

Company Secretary
ASX RELEASE 25 July 2012

Intention to increase APA's takeover offer for HDF

APA Group (ASX:APA) has today announced its intention that, subject to successful completion of satisfactory due diligence, it would be in a position to make a revised takeover proposal for Hastings Diversified Utilities Fund (ASX:HDF). This would comprise a substantial increase to its offer consideration and a material reduction in the conditionality of its offer.
The revised proposal would include an increase in offer consideration to a value of at least $2.50 per HDF stapled security, with the cash component of at least $0.60, and the remainder a fixed amount of APA securities. Together with the distribution from HDF of $0.025 per stapled security, due to be paid in early August, this represents a combined value of at least $2.525 per stapled security.
It is also APA's intention that, on obtaining a relevant interest in at least 70% of all the HDUF stapled securities, it will waive its 90% minimum ownership condition.
Further detail of the proposal and APA's approach to each of the conditions to its offer that remain outstanding at this time is set out in the attached letter that has today been sent to Hastings Funds Management, the responsible entity for HDF. This letter formally requests that APA be granted access to due diligence materials so as to progress the revised proposal.
APA Managing Director Mick McCormack said: "Following last week's announcement that the ACCC would not oppose APA's acquisition of HDF, we are now keen to progress our takeover offer. APA's revised proposal is clearly superior to the PPA offer - our offer will be at least 7.5% higher, and following due diligence we anticipate waiving a number of conditions so that our offer will be significantly less conditional than the PPA offer."
"In order to formalise the revised offer APA seeks a short period of due diligence - we anticipate that our work will be able to be completed in around a week. APA has today asked Hastings Funds Management to provide access to the data room that was provided to PPA, and we stand ready to progress this work" he said.

For further information please contact:

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About APA Group (APA)

APA is Australia's largest natural gas infrastructure business, owning and/or operating more than $8 billion of gas transmission and distribution assets. Its pipelines and assets span every state and territory on mainland Australia, delivering

50% of the nation's gas usage. Unique amongst its peers, APA has direct management and operational control over its assets and the majority of its investments. APA also holds minority interests in energy infrastructure enterprises including Envestra, SEA Gas Pipeline, Hastings Diversified Utilities Fund and Energy Infrastructure Investments.

For more information visit APA's website, www.apa.com.au

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