Aug. 6 (Bloomberg) -- Asciano Ltd., the Australian port and railroad operator fighting a bid from David Bonderman's TPG Capital, plans to sell shares and stakes in units to help fund expansions in Queensland state coal haulage and Saudi Arabia.

The company will sell as much as A$100 million ($92 million) of stock to existing shareholders, Melbourne-based Asciano said today in a statement. It won contracts to haul coal for Rio Tinto Group and Xstrata Plc and plans to start asset sales this half.

Chief Executive Officer and largest shareholder Mark Rowsthorn, 53, has rejected TPG's A$2.9 billion proposal as undervaluing Australia's second-largest transporter of coal. The stock traded 15 percent above the offer price, signaling some investors expect a higher bid.

``Anyone making a bid will have to lift the price because the company is doing its best to lift the worth of the stock,'' said Peter Rudd, a Melbourne-based analyst at Carroll, Pike & Piercy Pty. ``In light of what it has been announcing, joint ventures in Queensland and so forth on the rail front, it might make it a little more difficult for a predator to be successful.''

Asciano rose 4 cents, or 0.8 percent, to A$5.08 on the Australian stock exchange at the 4:10 p.m. close of trade in Sydney. TPG and Global Infrastructure Partners bid A$4.40 a share.

Cutting Cloth

From fiscal 2009, Asciano will pay shareholder dividends from free cash flow, the company said. Total payments this year will be 24 cents to 30 cents, it said. For the 2008 earnings period, the company paid out a total of 46 cents in dividends.

``They have to cut their cloth to suit,'' said Carroll, Pike & Piercy's Rudd, who said it's a more ``prudent'' approach to shareholder payments. ``Traditionally it was a stock that had a reasonable yield, but the distribution is now down because earnings are going to be lower.''

The company today reported a net loss of A$182 million for the 17 months ended June 30. It had earnings before interest, tax, depreciation and amortization excluding significant items of A$652.9 million in the year ended 30 June, in-line with previous guidance, it said.

Rolling Stock

The new coal haulage contracts are for more than 14 million metric tons a year and the company will spend as much as A$580 million on new rolling stock and infrastructure, Asciano said. The company is part of a group selected as the preferred bidder for the A$7 billion Saudi Landbridge project and is pursing the expansion of terminal operations in Brisbane, it said.

``To gain a recommendation from the board and the right to conduct due diligence, any proposal must recognize the value of our unique set of assets and must contain a sufficient control premium,'' Rowsthorn said today at an investor briefing broadcast on its Web site. Asciano has declined to give the bidders access to its finances. ``This proposal did not reach the mark.''

Asciano was created in June 2007, when Toll Holdings Ltd. spun off its port and rail units. The shares plunged to a low of A$2.68 on July 8, weighed down by concern over the company's debt burden and a money-losing investment in Brambles Ltd., the world's largest supplier of wooden pallets used to move and store goods.

The company has had weekly approaches in the past year from groups, Rowsthorn said on a call with reporters. Interest from other parties has accelerated as the stock fell, he said.

Buying Asciano will give TPG access to rising revenues from commodities transportation as Australia, the world's largest coal exporter, expands its ports and railways to meet demand from mining companies including BHP Billion Ltd. and Rio Tinto.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net

Last Updated: August 6, 2008 03:06 EDT