UPDATE 2-Brookfield bid for Australian rail, port assets hits regulatory red light
* Competition regulator rejects Brookfield's assurances
* Decision a blow to Australia's biggest Canadian takeover
* Bodes well for rival proposal from smaller Qube Holdings (Adds Brookfield comment, updates shares)
By Byron Kaye
SYDNEY, Nov 26 (Reuters) - An Australian regulator on Thursday knocked back an attempt by Canadian infrastructure giant Brookfield Asset Management Inc to overcome competition concerns holding up its A$9 billion ($6.53 billion) bid for port and rail firm Asciano Ltd.
The decision is a blow to a takeover proposal backed by Asciano and boosts the prospects of a rival bid from smaller Australian logistics firm Qube Holdings Ltd.
The regulator said it would make a final ruling on Australia's biggest inbound takeover in four years - and its biggest buyout by a Canadian firm - on Dec. 17.
The Australian Competition and Consumer Commission dismissed Brookfield's "long-term behavioural undertakings" to address worries that the deal would give it both the rail tracks and freight trains in some locations, potentially enabling it to cut out other freight operators.
"After detailed consideration, the ACCC has concluded that the undertakings are not acceptable," ACCC Chairman Rod Sims said in a statement, without specifying the undertakings. Continued...