Aug. 4 (Bloomberg) -- David Bonderman's TPG Capital offered A$2.9 billion ($2.7 billion) for Asciano Ltd., Australia's second-biggest coal transporter, in the country's largest leveraged buyout.

TPG and Global Infrastructure Partners offered A$4.40 a share cash for Asciano. The shares jumped 16 percent to A$4.83 at the close of trade and the Melbourne-based port and rail owner said it wouldn't allow TPG access to its finances because the bid undervalues the company.

Asciano, which hauls coal from the Hunter Valley to Newcastle, the world's biggest coal-exporting port, became an attractive target after its shares slumped 75 percent in the past year. The deal, which values Asciano at about $6.5 billion including debt, would be twice as big as Macquarie Group Ltd.'s $3.2 billion buyout of Sydney Airports Corp. in 2002, according to data compiled by Bloomberg.

``There's going to be greater use of port facilities; expansions are under way, so it's a growth area,'' said Peter Rudd, a Melbourne-based analyst at Carroll, Pike & Piercy Pty, adding that the offer will probably be raised. ``There'd be further upside I'd say, to bed it down.''

Australia is expanding its ports and railways to meet demand from mining companies including BHP Billion Ltd. and Rio Tinto Group as they lift exports, making Australia the world's top exporter of coal. Asciano is the biggest provider of bulk and general ship loading services.

Failed Attempts

TPG has been unsuccessful in its past two acquisition attempts in Australia. It was part of a Macquarie-led group whose A$11 billion offer for Qantas Airways Ltd., Australia's biggest airline, was rejected in May 2007. The following month, it withdrew from an auction of retailer Coles Group Ltd., which sold for A$19.7 billion. In 2006, TPG bought Coles' Myer department stores for A$1.4 billion. A TPG official declined to comment.

The increase in financing costs, shareholder resistance and higher valuations have forced buyout funds to abandon at least $36 billion of takeover attempts in Australia in the last two years, Bloomberg data shows. Private equity deals in the Asia Pacific region have fallen 29 percent in 2008 as the subprime mortgage market collapse curbed bank borrowings for acquisitions.

A Macquarie-led group bought Sydney Airports, Australia's biggest airport, from the government in 2002, the second-biggest acquisition by a private equity fund so far.

Rising Commodities Exports

Exports of commodities from Australia, the world's largest shipper of coal and iron ore, may rise to a record A$212 billion ($198 billion) in the year ending June 30, spurring demand for upgraded port and rail facilities as mining companies seek to meet China's demand for raw materials.

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 concerns 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 stock then rebounded 55 percent amid speculation of a pending takeover bid.

``They've got good quality assets, there's no doubt about that, but what the market has been concerned about is its high level of debt, over A$1 billion,'' said Carroll, Pike & Piercy's Rudd.

TPG Capital, the buyout arm of Bonderman's Fort Worth, Texas-based TPG, managed more than $50 billion as of April.

Asciano provides bulk haulage services to the coal and grain sectors in Australia, according to its Web site. It transports about 95 million tons of coal a year and has more than 600 locomotives and 14,000 wagons, it said on its Web site.

Unsolicited Offer

The offer is ``an unsolicited non-binding indicative proposal,'' Fiona Mead, Asciano company secretary, said in the statement. ``Security holders are recommended to take no action at this time.''

Australia may earn 12 percent more from commodity exports this financial year than forecast three months earlier because of higher prices, the government said on June 23. The nation's exports climbed to a record A$21.9 billion in May, stoked by rising sales to China.

China is the biggest buyer of Australian iron ore, taking about 50 percent of BHP's iron ore exports and about 55 percent of Rio's. The Asian nation may increase imports by 14 percent to 435 million tons this year, the China Metallurgical Mining Enterprise Association said in April.

To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Cathy Chan in Hong Kong at kchan14@bloomberg.net

Last Updated: August 4, 2008 04:35 EDT