"We are comfortable with the DUET Board's recommendation."
And with those eight straight words, UniSuper chief investment officer John Pearce has a $1.2 billion conundrum: where to stash Cheung Kong's cash?
UniSuper is DUET's biggest shareholder with a 16 per cent stake. While most DUET shareholders will be thinking about rotating into Sydney Airport or Transurban Group, UniSuper already has more than $2 billion in each of those.
It's also understood to have an almost substantial stake in Spark Infrastructure Group, while fellow listed network owner AusNet Services isn't the most liquid stock. Among the other utilities, Envestra is gone - thanks again to CKI - while UniSuper already has 14 per cent of APA Group worth another $1.5 billion.
The fund manager could always turn to unlisted infrastructure - as it does from time to time - but it would join a whole word of unlisted money chasing relatively few assets.
What we do know is UniSuper doesn't mind upping its exposure via equity capital markets transactions, which will make it a first point of call for bankers seeking to get chunky deals done in coming months.
And UniSuper is not alone. DUET's second biggest shareholder, Lazard, which owns 10.5 per cent, is another with big stakes in plenty of ASX-listed infrastructure stocks. It's expected to look offshore to restock its global infrastructure fund, should DUET be snapped up in May as scheduled.
DUET's third biggest shareholder - Legg Mason - is in a similar situation.
Of course, it's a good problem to have.
DUET has been a capital hungry beast under chief executive officer David Bartholomew, snaffling assets, raising equity and making money for shareholders along the way.
All eyes are now on the Foreign Investment Review Board process, which has started but unlikely to really get going in a formal capacity until next month.
CKI, seeking to buy 40 per cent of DUET as its related parties CK Property and Power Assets share the rest, has King & Wood Mallesons lawyers in its corner dealing with the FIRB process. Morgan Stanley is its financial adviser.
While respectful of the process, the Macquarie Capital, Gresham and Allens-advised DUET appears confident that FIRB should not pose a problem.
Should the deal fly with FIRB and DUET shareholders, as expected, it would mark an astonishingly smooth transaction at a time when there is much competition for regulated utilities. CKI didn't waste DUET's time with a low-ball or under-baked offer, making the target's job much easier.
