Qube ups ante with Asciano acquisition bid

Qube goes over Brookfield with share offer but doesn't sway Asciano CEO

Qube ups ante with Asciano acquisition bid
Qube places formal offer for Asciano.


A Qube consortium, which includes the company, Global Infrastructure Management (GIP) and the Canada Pension Plan Investment Board (CPPIB), has made a formal bid for the remaining Asciano shares it does not own, worth $9 billion.

The consortium, which already has a 19.99 per cent stake in Asciano, has offered an aggregate implied value of $9.25 per share, comprising of cash (approximately 75 per cent) and scrip.

Under the deal, GIP and CPPIB would acquire the rail business and Qube would take over Asciano’s Patrick container terminal business and its interest in Australian Amalgamated Terminals.

The new bid sits slightly above the $9.22 offer from the Brookfield Infrastructure Partners (BIP) consortium, which owns 19.2 per cent of Asciano’s shares after a 14.9 per cent purchase last week.

In an ASX statement, Qube says Asciano shareholders will have the opportunity to grow with the company through the scrip offering and avoid ACCC issues related to Brookfield’s ownership of Pacifical National.

"Asciano shareholders will be able to retain an exposure to Asciano's container terminal businesses, including the upside available from Asciano’s container terminal businesses being combined with Qube and operated by Australia’s most successful port logistics management team," the statement says.

"Asciano shareholders would not be exposed to the risks associated with Brookfield’s business and operations, and with Brookfield interests and CDIs, many of which are described in Asciano’s scheme booklet in relation to the Brookfield scheme."

The company says it is willing to distribute Asciano’s franking credits to shareholders, and is open to conversing with Asciano to determine an appropriate arrangement.


Asciano response

At today’s 2015 annual general meeting, Asciano chairman Malcolm Broomhead says the board is still considering both proposals.

"Qube has asked for due diligence to be completed by mid-December," Broomhead says.

"The Asciano board is considering the Qube proposal and will update shareholders in due course.

"The Asciano board remains committed to maximising value for our shareholders.

"As always, we will continue to keep the market informed of any material developments."

However, Asciano managing director and CEO John Mullen says the Brookfield deal is his preference.

"On the strategic front, if the Brookfield transaction concludes this will deliver the major strategic and growth solution which we have been searching for over some considerable while now," Mullen says.

"In our view, in the absence of a superior offer from another party, this remains the optimum solution for our business and for shareholders."

"We passionately believe that Asciano is a very fine company, irrespective of who our eventual owners may end up being, and those shareholders who choose to continue to have exposure to Asciano through Brookfield CDIs can continue the journey with us."


Brief history

The battle between Brookfield and Qube for Asciano started on August 18, when Brookfield’s consortium made a formal offer to acquire 100 per cent of the company capital.

On October 30, Qube’s consortium announced it has acquired 19.99 per cent of Asciano shares, which was followed on November 6 with Brookfield raising its share stake to 19.2 per cent.

Yesterday, Asciano and Brookfield entered an Implementation Deed, which would mean a Brookfield subsidiary would make a take-over offer for the remaining shares that Brookfield did not own.

That bid is subject to ACCC approval and would provide shareholders with an implied value of $9.21 per Asciano share.

Overnight, Qube put a non-binding indicative proposal to Asciano that offers an implied value of $9.25 per share.


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