The 9 month battle for control of ports and rail group Asciano is over after the company’s board yesterday recommended a formal $9.05 billion takeover bid from suitors Qube Logistics and Brookfield Infrastructure and a gang of investment funds from Canada and Asia.
Logistics group Qube, Canada’s Brookfield and six international investment funds have signed a binding agreement, under which Asciano will be broken up between the consortium parties.
As expected, the deal values Asciano at $9.28 a share, with shareholders receiving $9.15 in cash and an interim dividend of 13 cents a share, payable on March 24. In reality the offer price is $9.15 as Asciano shareholders will get the interim dividend regardless if the bid happens or not.
Shares in Asciano and Qube were suspended yesterday for the announcement and the start of a fund raising process for Qube.
Asciano shares re-listed and rose 1.2% to $9.86, well below the $9.05 price in the joint offer. Qube shares remain suspended to allow the $800 million share issue and associated placement to be started.
The deal is necessarily complex given the number of parties and the assets involved and the competition questions raised, especially from Brookfield’s involvement (they stymied its first bid and allowed Qube to get into the game and eventually grab the key port assets).
Qube and Brookfield will buy Asciano’s Patrick container terminals business in a 50-50 joint venture for $2.9 billion.
Asciano’s Pacific National rail haulage business will be bought by Global Infrastructure Management, the Canada Pension Plan Investment Board (CPPIB), China’s CIC Capital Corporation, Singapore sovereign wealth fund, GIC, and the British Columbia Investment Management Corporation (BCIMC) – thereby removing a key competition question from Brookfield’s direct involvement in the rail business.
The sale of Pacific National will occur via a scheme of arrangement, with the investment consortium also acquiring the 20% stakes in Asciano currently held by both Qube and Brookfield.
Brookfield and Qube will have no interest in the Pacific National rail business.
Brookfield, together with GIC, BCIMC and the Qatar Investment Authority, will acquire Asciano’s bulk and automotive ports services business for $925 million, including its 50% interest in Australian Amalgamated Terminals (AAT).
Qube has the right to buy the AAT interest for $150 million at a later date, but will have no interest in the bulk and automotive operations. That’s to lessen any competition queries.
The deal requires approval from the Australian Competition and Consumer Commission as well as the Foreign Investment Review Board. It is expected to be completed in late June if it is approved by Asciano shareholders at a meeting in early June.
Asciano will appoint an independent expert to review the deal before the shareholder vote. Grant Samuel did the experts report for the first Brookfield offer.
Qube is conducting an $800 million equity raising for its acquisition of a 50% joint venture stake in the Patricks Container Terminals business.
Of that, $494 million is being raised via a fully underwritten one for 4.4 accelerated rights issue to existing shareholders at $2.05 a share, compared to the closing price on Monday of $2.24. The remaining $306 million is being raised by a placement to CPPIB at $2.14 a share. >> > > > > Message protected by MailGuard: e-mail anti-virus, anti-spam and content filtering.
