Brookfield Asciano Bid Threatened as Rival Group Takes Stake

  • Qube partners with Canada Pension Plan, GIP on 19.99% holding
  • CPPIB, GIP interested in rail assets, Qube wants terminals

A group led by Qube Holdings Ltd., an Australian logistics operator, bought a 19.99 percent stake in Asciano Ltd. under a plan to carve up its rail and port assets and block an A$8.9 billion ($6.3 billion) takeover of the firm by Brookfield Infrastructure Partners.

Qube wants to own Asciano’s Patrick container terminal assets in Australia’s biggest cities while Canada Pension Plan Investment Board and Global Infrastructure Partners are interested in the Pacific National rail business, the Sydney-based company said Friday in a statement. The trio don’t support the Brookfield proposal and won’t vote in favor of it.

“A strategic combination of Qube with the Patrick containers terminals business as well as a small number of assets in the bulk, automotive and general stevedoring businesses currently owned by Asciano has the potential to create significant value,” Qube said.

Brookfield Asset Management Inc., Canada’s largest alternative asset manager, in August agreed to buy Asciano for cash and stock through its Brookfield Infrastructure Partners arm to gain control of the Pacific National rail unit and Patrick stevedoring businesses at ports in Melbourne, Sydney and Brisbane. The offer, which needs approval from the competition regulator, had an implied value of about A$9.15 a share when announced. 

Qube’s consortium offered to buy Asciano shares at a fixed price of A$8.80 apiece, 16 percent more than the last close, according to terms for the deal obtained by Bloomberg on Thursday. Qube Chairman Chris Corrigan previously ran the Patrick Corp. port and Pacific National rail business before selling it to Toll Holdings Ltd. in 2006. Toll spun off the port and rail assets into Asciano in 2006.

Asciano shares gained 7.1 percent to A$8.10 at 10:31 a.m. in Sydney, while Qube fell 1.1 percent.

A representative for Brookfield said Thursday he couldn’t immediately comment. Asciano said in a statement Friday it noted Qube’s announcement and would keep the market informed of developments.

Sydney-based Qube has a port and bulk unit with operations at the iron ore terminal of Port Hedland and at Port Kembla which handles cargo including cars and heavy machinery. Its logistics division provides road and rail container transport, warehousing and freight forwarding services.

Qube has funded a 6.3 percent interest in Asciano through a total return swap with UBS Group AG, it said. The remaining interest has been funded by GIP and CPPIB.

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