Rail and port logistic operator Asciano (ASX: AIO) has received a formal joint buyout offer from two consortiums led by Qube Holdings (ASX: QUB) and Canada’s Brookfield Infrastructure Partners, ending a lengthy takeover battle between the bidders.
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Asciano has agreed to a $9.05 billion takeover deal that will carve up the Australian rail and ports giant among rival suitors in an effort to sidestep regulatory concerns.
The Patrick container terminals business, which operates one on Fremantle’s two terminals, will be split between Qube and Brookfield and its consortium partners for $2.91 billion.
As part of the above transaction, Brookfield Infrastructure has committed to invest a minimum of US$350 million from its current liquidity into Asciano’s ports business, a unique network of port assets in Australia.
“Moody’s views the divestment of the ports businesses as weakening the business profile for Asciano as it reduces the scale, earnings generation and diversification of the remaining company”, the ratings agency said on Wednesday.
Asciano’s rail freight unit would go to China Investment Corp, the Canadian Pension Plan Investment Board, British Columbia Investment Management Corp, and US private equity firm Global Infrastructure Partners, Qube added.
Qube shares were in a trading halt as it presses ahead with a capital raising managed by JP Morgan and UBS.
“In addition, our transaction has been structured with a view to eliminating numerous issues associated with the prior offers, and therefore delivering a high degree of transaction certainty for Asciano shareholders”, said Sam Pollock, Chief Executive Officer of Brookfield Infrastructure.
Asciano said the $9.15 cash amount may be further reduced, as the company expects to pay a fully franked special dividend of 90 cents per share before the latest deal arrangement takes place.
Even so, the deal still needs clearance from regulators in Australia, New Zealand and Europe, including Australia’s competition watchdog and its Foreign Investment Review Board, which will check that Chinese ownership of rail assets is in the national interest.
Meanwhile, Brookfield et al will also acquire 100% of the BAPS business including both a 50% stake in Australian Amalgamated Terminals and a 50% stake in the ACFS Port Logistics Joint Venture for $925m.
Brookfield launched the bidding for Asciano in October, with Qube entering the scene the following month.
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The ACCC is expected to release a new timeline to review the joint takeover plan after the parties submit the new proposal to the regulator, Qube said today.
