Port and rail group Asciano has opened its books to upstart competitor Qube Holdings, after a Qube-led consortium launched a takeover bid to compete with a controversial existing offer from Brookfield.
Asciano, which owns ports business Patrick and rail business Pacific National, was reportedly hesitant to open up to due diligence by Qube.
Qube and Asciano are competitors in a number of instances around the Australian transport and logistics industry. They are both developing intermodal terminals in western Sydney, for instance.
But it seems Asciano is convinced that Qube’s bid – backed by a pair of Canadian funds – is genuine enough to warrant due diligence.
“Asciano Limited today announces that its Board of Directors has decided to grant the Qube Consortium access to confirmatory due diligence, subject to the agreement of appropriate confidentiality agreements,” the company told the ASX on Monday.
“This is in response to a non-binding indicative proposal received on 9 November 2015 from the Qube Consortium, comprising Qube Limited, Global Infrastructure Partners and Canada Pension Plan Investment Board, to acquire all of the issued capital in Asciano not already owned by the Qube Consortium at an implied value of A$9.25 per Asciano share.”
The Qube-led group made waves last month when it bought a 19.9% stake in Asciano – an amount considered enough to block a proposed takeover agreement by Brookfield, a Canada/Bermuda-based infrastructure investment group, which already owns WA’s Brookfield Rail business, and a controlling stake in Queensland’s Dalrymple Bay Coal Terminal.
The Australian Competition and Consumer Commission (ACCC) has already raised issues with the Brookfield’s proposed takeover, due to fears ownership of Pacific National, specifically, would create too much vertical integration with Brookfield Rail – which owns more than 5000km of railway through government lease – and the Queensland coal terminal.
With the ACCC’s final verdict on hold until December, the interference from Qube – which said it aims to block Brookfield’s plans – added to Brookfield’s troubles.
Meanwhile, Qube’s consortium is said to face a tough road ahead in terms of finding banks to provide funding for its takeover move.
A report in AFR’s Street Talk this week suggested banks may not like Qube’s plans to break up Asciano, so it can take the Patrick ports business. It is believed the move could negatively impact Asciano’s credit rating.
Faced now with competing takeover offers, Asciano said on Monday it still supports the Brookfield bid, which was formalised into a takeover offer following Qube’s posturing.
“The Asciano Board remains committed to maximising value for Asciano shareholders and will continue to keep the market informed of any material developments.”