Now we have a formal takeover battle for the ports and rail group Asciano after a consortium led by Qube Logistics turning its indicative bid into a binding offer.
The new offer values the ports and rail group at $9.08 a share and is a real competitor to Brookfield Infrastructure’s $9 billion cash and paper takeover bid for Asciano.
Qube’s group includes Global Infrastructure Partners, the Canada Pension Plan Investment Board and China’s CIC Capital Corporation .
They are offering $6.97 cash and one Qube share for every Asciano share they do not own beyond the 19.9% stake bought in the market late last year.
The consortium claimed its offer was superior to an earlier bid from Canada’s Brookfield Infrastructure based on Qube’s closing price of $2.11 on January 25. But the value of the offer fluctuates depending on movement in stock prices. Qube shares kicked higher yesterday.
Brookfield Infrastructure is offering $6.94 in cash and 0.0387 of its listed units, which are listed on the New York Stock Exchange, but are illiquid compared to Qube shares.
Asciano’s shares closed at $8.50 on Wednesday (the offer was announced ahead of trading) and they rose 4% to $8.84 yesterday. Qube shares rose nearly 4% to $2.18, which pushed up the value of its offer to $9.15.
The consortium sent a letter to Asciano chairman Malcolm Broomhead outlining its new firm offer. Mr Broomhead had asked for a response by February 5. The proposed offer remains “conditional" and dependent on signing transaction documents, the Qube consortium said.
Asciano said it was considering the proposal and would update investors "in due course". The board has previously recommended investors accept Brookfield Infrastructure’s takeover bid.
GIP, CPPIB and CIC plan to buy Asciano’s Pacific National rail business, while Qube wants Asciano’s Patrick container terminals business.
The consortium said it will allow Asciano’s board to declare fully-franked dividends of up to 90 cents a share and franking benefits of up to 38.6 cents a share, but said the $6.97 cash component of the offer will be reduced by the amount of any dividends.
The rival offer has a minimum acceptance condition of 50.1% (including the consortium’s current holdings). Brookfield Infrastructure currently owns 19.99% of Asciano.
Qube chairman Chris Corrigan has already said the group doesn’t need the Brookfield stake and can work with them.
The Australian Competition and Consumer Commission is currently reviewing both Brookfield Infrastructure’s and the Qube group’s takeover proposals and expects to make a decision by February 18.
WA farmer groups continue to oppose the Brookfield bid, even though the Canadian investment group has proposed changes to its structure and a sale of assets to try and mollify this strong opposition. The same farmer groups seem happier with the Qube offer.
