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APA shares slump as govt opposes HK buyout

Australian Treasurer Josh Frydenberg won't let Hong Kong's CK buy APA Group

Shares in APA Group have fallen 11 per cent after Treasurer Josh Frydenberg said he intends to block a $13 billion buyout of Australia's biggest gas pipeline company by Hong Kong's CK Group.

Mr Frydenberg's preliminary view is that the takeover was against the national interest because it would create a concentration of foreign ownership in the sector.

Frydenbeg said the move was not a reflection on CK Infrastructure Holdings Ltd, part of the empire founded by Hong Kong tycoon Li Ka-shing.

Analysts said the move appeared to be partly aimed at preventing Chinese ownership of a strategic asset.

"I don't think its just the China element, but a combination of important assets, concentration of ownership and China," said Morningstar analyst Adrian Atkins.

"I think the Chinese element maybe had a bit more of an impact than the treasurer's letting on ... it'd probably be unpopular with the electorate to have a major asset go to a Chinese firm."

Earlier this year, Australia banned China's Huawei from supplying equipment for a 5G mobile network citing national security risks, while Canberra last year accused Beijing of meddling in domestic affairs.

APA Group shares, which had never traded at the $11 offer price, fell back to pre-bid levels at $8.48, an almost five-month low, wiping $1.2 billion off its market value.

APA said it noted the treasurer's decision and would update shareholders in due course.