Melbourne based ports and rail owner, Asciano, was a star performer in the market last week with an unexplained 71 cent rise to close at $4.15 last Friday, and yesterday we got the reason why.
An unsolicited offer from an old private equity trawler through Australia, TPG, and a mate: an offer that was rejected by the target last night.
TPG Capital, the buyout arm of TPG Inc, and Global Infrastructure Partners offered $2.9 billion For Asciano, which was spun out of Toll Holdings last year around a year after Toll had acquired Patrick. Asciano contains many of the port and rail assets owned by Patrick.
Including debt, the offer is worth $7.64 billion bid (including $4.46 billion debt) for Asciano.
After the close of trade, Asciano refused TPG’s request to look at its books, arguing the bid "undervalues the business".
TPG and GIP had required that due diligence be completed "satisfactorily" before any final and binding proposal could be made. So without a much higher price, the offer goes nowhere for the time being.
And, despite the lack of a information in the statement about Asciano’s advisers, they turn out to be Macquarie Bank.
That makes the bid less than hostile. Macquarie is close to Asciano: indeed the company used Macquarie nominees to hide its stalking of Brambles until it was outed by Brambles management in an aggressive use of Corporations law.
After being sprung by Brambles Asciano and forced to withdraw after the credit crunch sank the shares. The company was forced to sell its Brambles’ position at a loss.
And, Macquarie and TPG got close and personal during the abortive bid for Qantas where TPG had a 14.9% stake in the offer and Macquarie was the key driver and adviser.
So the TPG and Global Infrastructure bid of $4.40 a share in cash for the company will probably end up winning, unless institutional shareholders in Asciano object.
The offer was an "unsolicited non-binding indicative proposal," the company said a statement to the ASX.”Security holders are recommended to take no action at this time."
AIO shares leapt 16% to $4.80 after a trading halt was called off. Its shares finished at $4.68.A week ago the shares were around $3.55.
The stock had slumped 55% in the year before today and were down more than two third from its 52 week high of $9.75 when they hit an all time low of $2.68 last month.
Then they started edging higher.
On July 21 Asciano said it knew of no reason why the share price should be rising. That was in answer to an ASX query.
Clearly someone or some people had an idea last week before it was one of the best performed shares in the ASX 200, rising 20.6% over the week, which was a big turnaround from the weakness since January.
That rise didn’t deter TPG and its partner from bidding, even thought there’s no premium to speak of in the deal any more.
Asciano asked for the trading halt before trading started yesterday, saying it was "pending the release of an announcement in relation to an indicative proposal to acquire Asciano."
Asciano later told the ASX that it had received an "unsolicited takeover offer from TPG Capital and Global Infrastructure Partners.
"Asciano has this morning received an unsolicited, non-binding indicative proposal to acquire 100% of the issued securities of Asciano by way of a scheme of arrangement.
"The proposal includes a cash alternative of $4.40 per Asciano security. There is a scrip alternative of unlisted securities in a bidding company."
TPG owns Myer here and was part of the bidding team for Qantas that failed. It has been buying into banks in the US and trying to buy into a bank in Britain (Bradford and Bingley) but abandoned that deal. TPG was also sniffing around Coles Group.
Global Infrastructure Partners is a joint venture between Swiss investment bank, Credit Suisse and General Electric.
And when you consider Dubai World bought P&O for $6.5 billion in 2006, (including Australia) it means that Australia’s stevedoring duopoly, which handles most goods through our ports, will probably finish up with the Asciano stalkers and Dubai: all offshore groups.
