- Australian target to pay Brookfield an A$88 million break fee
- Brookfield missed five-day window to submit superior offer
Asciano Ltd., the Australian port and rail operator at the center of a bidding war, switched allegiance to a proposal by Qube Holdings Ltd. and other investors that values the company at A$8.8 billion ($6.3 billion).
Melbourne-based Asciano said Canada’s Brookfield Asset Management Inc. had failed to submit a proposal beating the Qube group’s cash-and-stock offer of A$9.025 a share. Brookfield, whose bid was previously favored by Asciano’s board, will receive a break fee of A$88 million.
Even after today’s U-turn, the battle for control of Asciano may still be in limbo. Brookfield said last week it’s working on an all-cash offer of A$9.28 per share, but was unable to legally submit the proposal within the matching period that ended Monday. The competition watchdog isn’t due to rule on the offers until March 24.
Asciano shares rose 0.2 percent to A$8.92 at 10:23 a.m. in Sydney, compared with a 0.5 percent gain for the benchmark S&P/ASX 200 Index. Qube increased 3.8 percent.
Asciano had little option but to recommend Qube’s bid, said Adrian Atkins, an analyst at Morningstar Inc. in Sydney. While Brookfield has indicated it is working on a A$9.28-a-share offer, the ruling from the Australian Competition and Consumer Commission may yet dictate how much the Canadian company is willing to pay, he said.
“There’s a still a question mark over that Brookfield bid,” said Atkins. “The ACCC is going to play a big part.”
Asciano said Tuesday its board has recommended the offer from Qube, New York-based Global Infrastructure Management LLC, Canada Pension Plan Investment Board and a unit of China Investment Corp.
Under the offer, Sydney-based logistics firm Qube would buy the port business, including the Patrick container terminals. The rail operation will stay with its co-bidders while the remaining bulk and automotive port unit will be on-sold to an as yet unidentified third party.
Qube currently holds 19.99 percent of Asciano, while Brookfield owns 20.58 percent, according to Bloomberg-compiled data.