Gas pipeline owner APA Group has made a $1.8 billion takeover offer for Hastings Diversified Utilities Fund (HDF), an investment fund with gas pipeline assets.

APA Group already owns 20.7 per cent of HDF, and has offered 50 cents and 0.326 of its own securities for each remaining HDF security in an off-market bid.

The offer implies a value of $2.00 for each HDF security, and implies an enterprise value of about $1.8 billion for the investment fund managed by Hastings Funds Management.

HDF’s pipeline assets include Epic Energy’s three natural gas transmission pipeline systems – the Moomba to Adelaide pipeline system, the South West Queensland pipeline and the Pilbara pipeline system.

APA Group Chairman Len Bleasel said those assets are a natural fit with APA’s infrastructure as they are able to be connected to one or more of its pipelines.

“The combined group of APA and HDF will form a unique asset footprint of infrastructure assets, and is expected to own and/or operate more than 15,000 kilometres of gas transmission pipelines across mainland Australia,” he said in a statement.

“This transaction will create a bigger and broader energy infrastructure business, with a clear strategic focus on natural gas transmission.”

The offer requires a minimum 90 per cent acceptance level from HDF securityholders, plus regulatory approvals.

Hastings Funds Management chairman Alan Cameron said the board would carefully consider the terms of the proposed takeover offer and comment as soon as their assessment has been completed.

APA Group has also announced the sale of 80 per cent of its APA Gas Network into an APA minority owned unlisted investment vehicle.

The net enterprise value of the new investment vehicle would be $526 million, while the net funds from the sale are approximately $477 million, APA said.