Asciano Bidding Saga Ends With $6.7 Billion Offer
15 März 2016 - 5:50AM
Dow Jones News
SYDNEY—Canada's Brookfield Infrastructure Partners LP has teamed
up with Australia's Qube Holdings Ltd. and several global funds to
acquire rail-and-port operator Asciano Ltd. in a deal worth 8.92
billion Australian dollars (US$6.71 billion), putting an end to a
long bidding war.
Australian infrastructure assets have been fiercely coveted by
global investors because they are perceived to offer stable
long-term returns. Recent deals have included power grids and
commodity ports.
In addition, Australian port infrastructure has been attracting
particular interest from investors eager to exploit the world's
sharpening focus on building transport networks to facilitate
trade.
Brookfield Infrastructure began its pursuit of Asciano in late
June. Four months later, a group led by Qube Holdings signaled it
was considering a rival bid, saying that a tie-up between Asciano's
and its ports businesses would improve the Australian
transportation market.
On Tuesday, the pair said they and their partners—a group of
specialist infrastructure, pension and sovereign-wealth funds,
including from Qatar and China—agreed on a joint binding cash offer
for Asciano worth A$9.15 a share. Asciano shareholders will also
get a previously declared dividend of A$0.13.
Directors at Asciano—which handles nearly half of all container
traffic entering or leaving Australia—have recommended that
shareholders accept the deal.
"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," said Maurice James, Qube's
managing director, in a statement.
According to the agreement, Asciano's main business units will
be broken up. A group of investors, including a unit of China
Investment Corp. and Singapore's GIC Private Ltd., will own the
Pacific National rail business that hauls freight—including coal—to
port for export.
Qube, Brookfield and investors including the Qatar Investment
Authority will create a joint venture to buy Asciano's Patrick
container terminals business, which runs ports in cities including
Sydney and Melbourne and is the largest handler of container cargo
entering or leaving the country, for A$2.92 billion. Brookfield and
its co-investors will buy Asciano's bulk and automotive ports
services business, which transports everything from cars to grain,
for A$925 million.
In recent months, Qube and Brookfield Infrastructure made
competing bids to buy Asciano. Both groups purchased large bundles
of Asciano stock. Last month, Qube and Brookfield said they were
considering jointly buying Asciano and planned to break the
company up.
The partners expect to seek shareholder approval at a meeting in
June. The partners have already "had extensive engagement" with the
Australian Competition and Consumer Commission, the country's
competition regulator, on their past individual proposals "and the
likely areas of ACCC interest are well understood," Qube said.
Brookfield faced antitrust challenges when it was considering a
lone bid: The Australian regulator raised concerns that a proposed
takeover by the company, which operates another rail network here,
could hurt competition for rail services in some of the country's
main resource-production hubs.
On Tuesday, Brookfield Infrastructure said the joint bid was
"clearly superior to any previous offer" and would be beneficial to
its own operations.
"With this new transaction, we will globalize our container
terminal business, and expect to have opportunities for further
optimization given Qube's expertise in the Australian logistics
industry and its history with these assets," Brookfield
Infrastructure Chief Executive Sam Pollock said.
The Brookfield Infrastructure-led investor group includes
British Columbia Investment Management Corp., Qatar Investment
Authority and GIC Private.
The group led by Qube—which has a market value of about A$2.4
billion—includes Global Infrastructure Partners LLC, Canada Pension
Plan Investment Board and China Investment Corp.
Last year, China's Landbridge Group bought a long-term lease in
the Port of Darwin in Australia's north, saying it intended to
increase two-way trade between Australia and Asia. A year earlier,
China Merchants Group teamed up with Australian fund-manager
Hastings Funds Management to buy the lease on the Port of Newcastle
in New South Wales state, the world's biggest coal export
terminal.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
March 15, 2016 00:35 ET (04:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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