Brookfield Infrastructure and its partners will acquire Australian transportation company Asciano Ltd in a friendly cash-and-stock deal worth $11.6 billion.
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Prior to US trade, the deal valued the target at $9.15 a share, though a 2 per cent drop in Brookfield’s share price overnight has dragged it back to $9.10 a share.
Foreign investors have been buying Australian transport assets amid a decline in the local currency and government plans for spending on infrastructure.
Asciano received the proposal June 26 with Brookfield offering A$9.05 a share through a mixture of cash and stock in listed fund Brookfield Infrastructure Partners LP, the companies said July 1.
Brookfield Infrastructure says the deal gives Asciano a total value of A$12 billion, including A$3.1 billion of assumed debt.
Asciano’s former parent company, Toll Holdings, agreed to a A$6.5 billion takeover by Japan Post Holdings Co Ltd [IPO-JAPP.T] earlier this year. The transaction would be the group’s largest in Australia, exceeding the A$4.8-billion that Brookfield Asset Management Inc. paid in 2007 for Multiplex Group, the builder of London’s Wembley Stadium.
Brookfield Asset Management is the largest shareholder in Brookfield Infrastructure Partners and owns the general partnership that controls its investments.
Shareholders will also have the opportunity to receive 90c of the $6.94 a share payout by way of a fully franked special dividend, which could provide an additional 39c of value for eligible shareholders.
Analysts said Aurizon could acquire some of Pacific National’s rail assets if Brookfield succeeds in buying Asciano and sells off parts of the business.
Brookfield Infrastructure’s assets in Australia include the Dalrymple Bay Coal Terminal in Queensland and a freight rail network.
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Brookfield Infrastructure owns 30 port terminals in North America and Europe, and believes it could transfer the intellectual property that Asciano has used in automating its Australian ports to North American ports.
