Brookfield, Qube might join hands to buy Asciano

Photo from the official Twitter page of Asciano

Groups led by Brookfield Asset Management Inc. and Qube Holdings Ltd. are considering joining forces to buy Asciano Ltd. in a deal valuing the Australian port and rail operator at A$9.1 billion ($6.6 billion).

The two groups, which have been dueling over Melbourne-based Asciano for months, are discussing a joint cash offer of A$9.28 per share, according to a statement from the target to the ASX on Tuesday. That’s 4.6 percent higher than the target’s closing price on Monday.

Asciano’s board views the potential deal, which would see the company’s ports and rail businesses broken up, as “likely to be attractive” to shareholders though notes the discussions are at a preliminary stage, according to the statement.

Asciano last week switched allegiance to a cash-and-stock offer from Qube, New York-based Global Infrastructure Management LLC, Canada Pension Plan Investment Board and a unit of China Investment Corp. Qube currently holds 19.99 percent of Asciano, while Brookfield owns 19.33 percent, according to Bloomberg-compiled data.

“In the absence of any alternative superior proposal capable of acceptance, the Asciano Board continues to recommend the Qube Consortium proposal as announced on Feb. 16,” it said Tuesday.

Asciano shares were 1.6 percent higher at A$9.01 at 11:01 a.m. in Sydney while Qube gained 8 percent to A$2.17.

Asset Split

The Brookfield consortium also includes GIC Private Ltd., British Columbia Investment Management Corp. and Nitro Corp., Asciano said. The Australian Competition and Consumer Commission is due to rule on Qube’s existing offer on March 24.

Under the joint proposal being discussed, Global Infrastructure Management, CPPIB, CIC Capital and certain members of the Brookfield consortium apart from Brookfield would acquire

Asciano’s rail business.

Qube, Brookfield and members of the Brookfield consortium would acquire 100 percent of Asciano’s Patrick container terminal business, aside from a 50 percent interest in ACFS Port Logistics, for A$2.9 billion, according to a letter from Brookfield to Asciano.

Asciano expects any binding proposal would be subject to a number of conditions including approval by the ACCC and the Foreign Investment Review Board.

“This potentially brings it to an end,” said Shannon Rivkin, Sydney-based investment director at Rivkin Securities Pty. “That’s still pending them agreeing on the final details, but it brings to an end the chance that there will be any more counter bids.”

Bloomberg

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.