Asciano’s port and rail businesses will be separated under a takeover deal reached on Tuesday between former rival bidders Brookfield Infrastructure and Qube Holdings.
At $9.28 a share, the newly-announced joint takeover bid is nearly 5% higher than the $8.87 closing price on Monday, and values the company at $9.05 billion.
It has also been arranged with the aim of eliminating many of the competition concerns raised by customers and Australia’s competition watchdog, during the earlier, separate bids for the company.
Under the terms – which are still subject to multiple forms of approval – the Asciano pie will be carved up and acquired by various combinations of Qube, Brookfield, and the international funds which have backed each of them in their respective consortiums during the protracted takeover battle which has taken place over the past few months.
Asciano’s Patrick Container Terminal business will be acquired by a 50/50 joint venture of Qube and Brookfield and its consortium partners.
Patrick manages major terminals at Port Botany, Melbourne, Brisbane and Fremantle.
Brookfield and its consortium partners will also acquire Asciano’s Bulk & Automotive Ports Services (BAPS) business, which manages Asciano’s numerous smaller, non-container terminals around the country.
The BAPS business includes Australian Amalgamated Terminals, an existing joint venture between Asciano and Qube.
An earlier statement from the parties suggested Qube will have the option of buying the other half of AAT, from Brookfield, at a later date.
In total, the combined Asciano ports businesses would be acquired for a total value of $3.84 billion.
Meanwhile, Brookfield and Qube’s respective financial partners will get together and buy Pacific National, Asciano’s significant rail business.
The financial partners, known collectively as the ‘Rail Consortium’, are GIC Private Limited, British Columbia Investment Corporation, the Canada Pension Plan Investment Board, Global Infrastructure Management and CIC Capital.
The whole deal, which has been unanimously approved by the Asciano board, is now subject to approval from Asciano shareholders.
It also needs approval from regulators including the Australian Competition and Consumer Commission (ACCC), New Zealand’s Overseas Investment Office (OIO), Australia’s Foreign Investment Review Board (FIRB), and the Australian Stock Exchange (ASX).
The scheme will also need an independent expert’s approval, certain third party consents, court approvals and, if required, approval under the EU Merger Regulations, Asciano said.
The parties have set an expected date for the transaction to be finalised of early June.
Qube managing director Maurice James was pleased to announce the transaction plans.
“Entering into binding documentation in relation to the transaction represents a significant step forward in the realisation of Qube’s strategy to dramatically improve the efficiency of the container import and export chain,” James said.
“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.”
Brookfield chief executive Sam Pollock was similarly positive.
“We are pleased to deliver a joint transaction that is on an all-cash basis and clearly superior to any previous offer,” Pollock said.
“In addition, our transaction has been structured with a view to eliminating many of the issues associated with the prior offers, and therefore delivering a high degree of transaction certainty for Asciano shareholders.”
Pollock said his company’s partnership with Qube to run the container terminals business would be a winner.
“With this new transaction, we will globalise our container terminal business, and expect to have opportunities for further optimisation given Qube’s expertise in the Australian logistics industry and its history with these assets.”