UPDATE 2-Brookfield ups ante on $6.5 bln approach for Australia's Asciano

Fri Nov 6, 2015 12:31am EST
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* Brookfield buys 19.2 pct of Asciano

* Australia's Qube already has 19.9 pct, vows to block Brookfield

* Competition regulator may need to intervene (Recasts, adds fund manager comment, shares)

By Byron Kaye and Colin Packham

SYDNEY, Nov 6 (Reuters) - Canada's Brookfield Asset Management shelved a $6.5 billion buyout agreement with Australian port and rail giant Asciano and said it will launch a formal takeover offer instead, threatening a rival proposal and raising the antitrust regulator's role in deciding the outcome.

Since Brookfield and Asciano agreed to a buyout in August, local port competitor Qube Holdings Ltd has bought one-fifth of the target and vowed to oppose a Brookfield takeover in favour of its own proposal to split the target's assets between itself and global investment partners.

The Australian Competition and Consumer Commission (ACCC) has also suggested it might stop Brookfield buying Asciano since the Canadian suitor already owns some of the railways Asciano's trains run on. It will make a final ruling on Dec. 17.

But on Friday, Brookfield fought back by buying its own one-fifth stake in Asciano. And in a subtle but significant change, it said it would delay the agreed buyout and launch a formal takeover instead, meaning it needs only 50.1 percent shareholder approval, rather than 75 percent.

That effectively kills Qube's chances of using its stake to help block the deal, leaving the regulator to decide whether to let Brookfield buy all or some of Asciano or block it outright. The latter would leave the target for smaller Australian firm Qube, chaired by the former head of Asciano's ports unit.   Continued...