Qube Holdings has the upper hand in its fight for Asciano after winning favour for its $9.01 billion offer from the target company's board.

Its long-running battle to take over Australia’s largest rail and ports operator is, however, set to extend further as rival suitor Brookfield readies its own all-cash bid.

Asciano said it was formally recommending Qube’s offer to shareholders after Canadian infrastructure giant Brookfield failed to submit a better offer.

Asciano had asked Brookfield to either match or beat Qube’s revised offer by February 15.

“The Asciano board has determined that the Qube consortium proposal is superior to the proposal from Brookfield. The board unanimously recommends the Qube consortium proposal to shareholders,” Asciano said in a statement.

Qube, along with consortium partners Global Infrastructure Partners, Canada Pension Plan Investment Board and China Investment Corporation, has offered one Qube share and cash payment of $7.04 for every Asciano share held, valuing the company at $9.24 a share.

Its offer trumped a previous $8.9 billion bid that Brookfield outlined in November.

The Qube and Brookfield consortiums each directly hold a stake of about 20 per cent in the target.

Asciano said it has now signed a binding agreement with the Qube-led group, and will pay a break fee of $88 million to Brookfield as a result of the change in its recommendation.

Under Qube’s proposal, the logistics company will directly acquire Asciano’s entire ports business for $2.65 billion. Qube has said the combination will double the size of the business and result in double-digit earnings.

Qube’s partners GIP, CPPIB and CIC will acquire Asciano’s main Pacific Rail business, while its remaining bulk, auto and ports services businesses (BAPS) will be sold to an entity owned by these partners, for an enterprise value of $850 million.

Asciano, which handles nearly half of all container traffic entering or leaving Australia through its Patrick ports and AAT Terminals businesses, and also owns the Pacific National rail freight business, is seen as a coveted acquisition for sovereign and pension funds.

The bidding war for the company is expected to heat up further, as Brookfield waits for its current offer to lapse on February 18, before launching a promised all-cash bid for Asciano at $9.28 per share.

The Canadian bidder wrote to Asciano earlier this month to say it was working to add two new partners – Qatar Investment Authority and Canadian pension fund PSP Investments, to its existing consortium, and would make a revised bid once funding arrangements were in place.

Brookfield, which accepted some Asciano shares under its existing offer to take its shareholding beyond 20 per cent, has claimed this limit has restricted it from adding new consortium partners in order to revise its proposal, under Australia’s current takeover rules.