The $9-billion battle for control of Asciano (AIO) will be delayed by another month with the competition regulator, the Australian Consumer and Competition Commission, revealing fresh concerns over elements of the joint takeover bid made by Qube Logistics (QUB), Brookfield Infrastructure and six international investment funds.
While Asciano’s board has recommended that investors accept a takeover bid worth $9.28 a share, shareholders will have to wait for a few more months to get their hands on that payout – that’s assuming the bidders can meet the ACCC’s new concerns.
The ACCC says its final decision will now be delayed a month to July 21 – which is also well after the Federal election on July 2 and taking the massive offer well clear of any political impact.
The combined bid will see Asciano’s port and rail operations split into three parts, with separate consortiums acquiring the company’s rail, ports and bulk and automotive ports services businesses.
However, the ACCC still harbours concerns about the merger and released a statement of issues yesterday outlining the new concerns.
The regulator outlined concerns over the vertical integration of Patrick container terminals with Qube and Australian Container Freight Services.
ACCC chairman Rod Sims said the regulator had received a large number of submissions with some in the market concerned by the prospect of less competition from the tie-up between Patrick, Qube and ACFS.
He noted the ACCC was concerned Patrick container terminals may provide “preferential access" to Qube and ACFS vehicles, along with Qube regional export trains into Port Botany, which could lead to a hike in rivals’ costs.
“Market participants have expressed concerns about the vertical integration of Patrick container terminals with the two largest landside import-export container logistics providers in Australia, Qube and ACFS. The ACCC considers this to be a significantly greater degree of vertical integration than the current situation where Patrick is vertically integrated with only ACFS.”
“The ACCC is concerned that Patrick container terminals may provide preferential access to Qube and ACFS vehicles, and Qube regional export trains running into Port Botany, and raise rivals’ costs. Qube and Brookfield will each own 50 per cent of Patrick container terminals, and may have parallel incentives to favour their landside logistics operations,” Mr Sims said.
“There are also concerns regarding foreclosure of rival stevedores. Market participants have suggested that if Patrick gives favourable treatment to the container logistics operations of both Qube and ACFS, then Qube and ACFS may provide a superior service offering to importers and exporters on condition that they use shipping lines calling at Patrick container terminals. This may lessen competition in stevedoring.”
In addition, the ACCC is considering whether stevedoring and empty container park services will be bundled together, in a way that forecloses rival stevedores.
Qube shares ended steady on $2.35 and Asciano shares eased 0.1% to $8.85.
