Agribusiness & Food, Logistics, Ports & Terminals

Farmers happy as Qube blocks Asciano play

Pacific National crane at Chullora. Photo: Cameron Boggs

Farming groups have praised logistics and infrastructure business Qube Holdings, which will block Brookfield’s bid to acquire 100% of port and rail giant Asciano after it bought a 19.9% stake in the ASX-listed business.

Qube teamed up with a pair of North American investment firms to acquire nearly one-fifth of all Asciano shares at a premium price of $8.80 late last week.

Brookfield Infrastructure Partners, a Canadian/Bermuda-based firm, wants to buy 100% of Asciano for $9.15 a share.

But Qube, which now has enough shares to block the sale, says it intends to do just that.

“Qube [and investment partners] GIP and CPPIB do not support the current Brookfield scheme proposal and do not intend to vote in favour of it,” the company said on October 30.

Qube said it wants to negotiate with Brookfield over a split-up of Asciano’s assets. But speculation is that the company and its investment partners could be looking to form a takeover of their own, blocking Brookfield out of the picture completely.

Qube, chaired by former Patrick boss Chris Corrigan, believes it should acquire Patrick – Asciano’s ports subsidiary. Its investment partners, GIP and CPPIB, are said to be interested in the Pacific National business, Asciano’s rail subsidiary.

“Qube has an interest in determining the ownership of the Patrick Businesses as it believes the combination of Qube with the Patrick Businesses would be genuinely transformational for Qube and the Australian transportation market,” Qube told the ASX.

Qube managing director Maurice James said the Qube management team had amassed more than 20 years of experience in Australian supply chains, both at Patrick and now at Qube.

“Over the last eight years we have built Qube into Australia’s leading provider of integrated logistics with operating divisions providing services for clients in both import and export cargo supply chains,” James said.

“This now includes Moorebank, in South Western Sydney, the largest and most significant new port-related infrastructure project currently being undertaken in Australia.

“The acquisition of the Patrick Businesses would further implement this strategy and provide significant opportunities to create substantial shareholder value, both through improving the operations of the Patrick businesses and through the benefits of combining the businesses with Qube’s assets.”

Qube is part of the Sydney Intermodal Terminal Alliance along with rail business Aurizon.

SIMTA in June agreed with the Commonwealth on terms to build the Moorebank Intermodal Terminal, which is designed to handle more than a million containers every year.

If it acquired Patrick, Qube believes it could improve road and rail interface performance through the Moorebank facility.

“Qube believes that any transaction resulting in the combination of Qube with the Patrick Businesses, if it were to eventuate, would be highly accretive to Qube shareholders in the medium term,” the company concluded.

Farming groups, who have opposed Brookfield’s takeover of Asciano – fearing the company could take unfair advantage of its Brookfield Rail business in WA if it also owned Pacific National – praised the Qube move.

NSW Farmers grains spokesman Dan Cooper reportedly told Fairfax farmers felt more comfortable with Qube potentially taking over its rival business.

“Qube doesn’t have the reputation that Brookfield has,” Cooper was quoted to have said.

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