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.
Asciano, which has been the subject of a long-drawn takeover battle between local logistics firm Qube and Canadian infrastructure giant Brookfield, has signed binding agreements with a joint consortium that includes the two rivals and six other global investment funds.
The company’s board has recommended the joint offer, with shareholders to receive $9.15 per share in cash and an interim dividend of 13 cents a share.
Asciano, which owns the Pacific National rail freight business, and handles nearly half of all container traffic entering or leaving Australia through its Patrick container terminal unit, is seen as a coveted acquisition for infrastructure-focused global pension funds.
In February it reported a lift in its half year profit to nearly $200 million on the back of strong coal haulage volumes, and reiterated guidance for flat to low single-digit growth in full year earnings.
Under the new proposal, Asciano’s main Pacific Rail business will be taken over by five funds – China Investment Corp, Canada’s CPPIB, Singapore’s GIC, Global Infrastructure Partners and British Columbia Investment Management Corp (BCIMC).
The Patrick container terminal business will be jointly acquired by Qube and Brookfield for $2.92 billion, with Brookfield consortium partners GIC, BCIMC and Qatar Investment Authority also participating.
Asciano’s bulk, auto and ports services (BAPS) businesses will be taken over by Brookfield, GIC, QIA and BCIMC for $925 million, with Qube holding rights to buy out the 50 per cent stake in the Australian Amalgamated Terminals business, for $150 million.
“I believe the agreement we have now reached represents the most common sense resolution to the ownership of Asciano and delivers the best result for all stakeholders,” Qube managing director Maurice James said.
Mr James and Qube chairman Chris Corrigan have previously run the Patrick business.
Qube separately announced an $800 million equity raising to fund the Patrick acquisition. The company is raising $494 million through a rights share issue to existing shareholders, at a discounted price of $2.05 a share.
It will also raise another $306 million from a share placement to CPPIB at a higher price of $2.14 per share.
The takeover deal will be subject to a review by the ACCC.
The competition regulator has previously flagged concerns over Brookfield’s previous bid, and had also been evaluating Qube’s previous offer, but suspended the process last month on news the two groups were planning a joint bid.
Qube said the transaction has been structured to address all potential competition issues that could be raised by the regulator.
The consortium will lodge a detailed submission to the ACCC on the proposal.