Fight for Australia's Asciano intensifies with Qube's $6.3 billion offer

Tue Nov 10, 2015 12:17am EST
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By Byron Kaye and Swati Pandey

SYDNEY (Reuters) - The battle for Australian stevedoring and rail giant Asciano Ltd AIO.AX escalated on Tuesday after ports firm Qube Holdings Ltd (QUB.AX: Quote) made a $6.3 billion offer that narrowly beats a rival bid and is expected to draw less concern from antitrust regulators.

Qube, led by Chris Corrigan who ran Asciano's port unit for 16 years, made an informal cash and scrip offer worth A$9.25 per share, a day after Asciano endorsed a similar bid from Canada's Brookfield Asset Management (BAMa.TO: Quote) worth A$9.22.

The war has seen both Brookfield and Qube dig in their heels by taking one fifth of Asciano each and much will hinge on whether Asciano allows Qube to do due diligence or pursue a buyout that Australia's competition regulator has already flagged it may block.

The Australian Competition and Consumer Commission (ACCC) has said it could oppose a full Brookfield takeover as the Canadian firm owns the rail tracks Asciano's freight trains run on.

Qube said in a statement its proposal would not need ACCC backing. Qube, which is about one-third the size of Asciano, has teamed up with Global Infrastructure Partners and Canada Pension Plan Investment Board in its bid and made clear it would take the ports business while its partners would gain the rail freight division.

Asciano Chairman Malcolm Broomhead said in a teleconference he has no preference as to the buyer but added that the likelihood of getting a deal done would be an important factor.

"The board really is focused on one thing and that is that we maximise returns to our shareholders, which ... goes to do-ability as well as value. As long as we're satisfied on do-ability, it's simply a matter of value," he said.

Brookfield declined to comment.   Continued...

Brookfield Asset Management CEO Bruce Flatt looks on at their annual general meeting for shareholders in Toronto, May 7, 2014.  REUTERS/Mark Blinch