Asciano takeover deal hits speed bump


ACFS alleges breach of contract as Asciano split becomes imminent

Asciano takeover deal hits speed bump
A directions hearing has been scheduled for 2pm tomorrow.

 

A few weeks before Asciano’s crucial shareholder meeting regarding its $9 billion takeover deal with Qube Group and Brookfield Infrastructure, the company finds itself in the middle of legal action under a joint-venture agreement with ACFS Port Logistics.

The Supreme Court of New South Wales has issued a summons to Asciano after container logistics firm ACFS sought clarification of the impact of the takeover on its business and its rights under a 2015 deal with Patrick that saw a merger of operations of both companies in Sydney and Melbourne.

The stakeholders are seeking "orders clarifying the parties’ rights under the joint venture agreement and the effect of the scheme (of arrangement) on those rights", and orders protecting the interests of the plaintiffs, Asciano says.

ACFS alleges that in July last year Asciano agreed to remain a combined rail and ports entity for the next three years but the latter’s binding agreement with Qube and Brookfield will see the ports and rail arms split between the joint consortium.

ACFS claims this is a breach of its agreement with Asciano.

Under the takeover agreement, Qube and Brookfield along with its partners, GIC, bcIMC and QIA are due to acquire an equal share of Patrick for $2.915 billion.

However, Qube is a major competitor of ACFS, and the legal action is an attempt by the company to protect its interests in the face of an impending takeover by rival company.

A directions hearing has been scheduled for 2pm tomorrow.

Asciano says it will "vigorously" defend its position against the ACFS action and hopes the legal action will not delay the transaction from going through as originally intended.

"Asciano believes the transaction is able to be completed without breaching the ACFS shareholders' agreement," the company says.

"If Asciano is shown to be correct, then the transaction will proceed as planned. Otherwise resolution will require a commercial negotiation to satisfy ACFS's issues."

The company intends to publish an investor notice before May 26.

In April last year, ACFS entered a 50-50 joint venture with Asciano’s logistics arm Patrick that saw a merger of operations of both companies in Sydney and Melbourne.

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