Qube gains half of Patrick while Pacific National goes to internatioanl investment firms
As flagged, an alphabet soup of investors, led respectively by Qube Group and Brookfield Infrastructure, have unveiled a binding agreement to buy and divide Asciano.
The ‘joint consortium’ is made up of those two firms along with Global Infrastructure Management (GIP), Canada Pension Plan Investment Board (CPPIB), CIC Capital Corporation (CIC Capital), GIC Private Limited (GIC), British Columbia Investment Management Corporation (bcIMC) and Qatar Investment Authority (QIA).
Patrick Container Terminals, the prize Qube most values, is to be bought for $2.915 billion in a 50-50 joint venture with Brookfield and its partners, GIC, bcIMC and QIA.
GIP, CPPIB, CIC Capital, GIC and bcIMC will gain the Pacific National rail business through a share arrangement with the lead pair.
Brookfield Infrastructure, GIC, bcIMC and QIA land the Bulk & Automotive Ports Services business, including the 50 per cent shareholding interest in Australian Amalgamated Terminals (AAT), together known as the BAPS businesses, and related shareholder loans for $925 million.
But Qube has the right to subsequently acquire the 50 per cent interest in AAT out of the BAPS businesses for $150 million, subject to ACCC clearance, or to nominate a third party buyer.
In return and with the backing of their board, Asciano shareholders get the $9.28 per share announced on February 23, less the interim dividend of $0.13 declared by Asciano on February 24 which is payable on March 24.
“Entering into binding documentation in relation to the Transaction represents a significant step forward in the realisation of Qube’s strategy to dramatically improve the efficiency of the container import and export chain,” Qube MD Maurice James says.
“Entering into binding documentation in relation to the Transaction represents a significant step forward in the realisation of Qube’s strategy to dramatically improve the efficiency of the container import and export chain.
“I believe the agreement we have now reached represents the most common sense resolution to the ownership of Asciano and delivers the best result for all stakeholders.”
The deal is contingent on another alphabet soup, this time of regulators in Australia in the European Union.
Probably most important is the Australian Competition and Consumer Commission (ACCC), which has been awaiting the outcome of consortium negotiations and which has been heavily involved in the earlier contest.
The transaction has been structured to address potential competition issues. In particular:
Brookfield Infrastructure will not acquire any interest in the Pacific National rail business
Qube will not acquire any interest in the BAPS Businesses.
“Further, the exercise of the Qube right to acquire the remaining 50 per cent shareholding interest in AAT from Asciano is a separate transaction which will be subject to separate ACCC review process,” Qube says.
“The Joint Consortium parties will shortly lodge a detailed submission with the ACCC in relation to the proposal and anticipate that the ACCC will release its review timeline following an initial review of that submission.”
Finalisation is expected in late-June.
To pay for its part of the Patrick deal, Qube is seeking $800 million from the market.
James reiterates the transformative nature of the move, inisisting gaining Patrick “creates significant opportunities for productivity improvement and innovation across the Australian container terminal, logistics and transportation sectors, delivering substantial value for Qube shareholders as well as the broader logistics chain”.