Asciano board now sees Qube as superior bidder

Move follows official bid and comes despite concern about Brookfield consortium break fee

Asciano board now sees Qube as superior bidder
Asciano is waiting for more bids.


The Asciano bidding war is progressing as expected with the company’s board finding the Qube consortium’s official bid trumps that of the Brookfield consortium.

Brookfield has five working days to submit a matching or superior proposal, Asciano’s board says.

"Asciano has also been informed by Brookfield Infrastructure of details concerning a revised transaction on which they are working," the board adds.

The announcement comes amid reports Brookfield is preparing to up the ante with a new all-cash offer and after the Australian Competition and Consumer Commission (ACCC) shifted its "indicative decision" from February 18 to March 24 to take account of both bids.

Though Qube makes no mention of a revised Brookfield offer, it has added another 7 cents to the offer price after talks with Asciano, "in part recognition of the expected cash generation by Asciano in the period prior to close of any takeover offer".

Qube says its present position depends on Brookfield giving up and, therefore should not be regarded as a ‘takeover bid’ as defined by section 631 of the Corporations Act, which covers time limits and liabilities.

Asciano stopped short of recommending the Qube bid at this stage as that would trigger an $88 million break fee payment to Brookfield.

"If Brookfield Infrastructure does not submit a matching or superior proposal within the required time frame, the Asciano board will be able to change its recommendation and execute the Qube consortium agreements," it says.

"Under the terms of the Brookfield bid, none of the Asciano directors may change their recommendation until the completion of the matching rights process."

The ACCC says its deadline delay is needed to handle very recent developments.

"The ACCC requires time to consult on Qube’s transaction structure, given we have only had details of the structure for a very short period," ACCC chairman Rod Sims says.

"We also need to consider whether revised undertakings offered by Qube can be consulted on, and if so, time for that consultation to take place.

For the Brookfield consortium acquisition, the ACCC requires further time to consider issues raised by market participants about Brookfield’s undertakings and to consider further revisions of Brookfield’s undertakings.

"We need to consult further with market participants about the proposed divestment of Asciano’s Pacific National intermodal rail operations, other vertical integration issues in Western Australia, and undertaking commitments in relation to the Dalrymple Bay Coal Terminal, and then give Brookfield an opportunity to respond," Sims says.

Asciano urged its shareholders to sit tight and await further developments.

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