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The final $9 billion takeover and breakup of Asciano by a super-sized consortium

Port Botany in Sydney. Jamie Fawcett/Getty Images

A super-sized consortium of companies from Australia, Canada, Qatar and China has finally created a winning cash bid for the ports and rail fright group Asciano.

Pushing aside previous script bids, the latest is pitched at $9.15 cash a share, valuing Asciano at $8.924 billion. It is lower than previously foreshadowed because of a 13 cents a share dividend declared last month.

The Asciano board has approved the deal, which is expected to finally close in June, ending a bidding war which started in July last year. It also means a break up of assets at Asciano.

Chris Corrigan’s Qube will get what it always wanted out of the deal — the Patrick Container Terminals Business — but in a 50/50 joint venture with Brookfield Infrastructure and its consortium for $2.915 billion.

The super consortium is made up of the members of two previously competing groups bidding for Asciano. They are: Qube Holdings Limited, Global Infrastructure Management, Canada Pension Plan Investment Board, CIC Capital Corporation, Brookfield Infrastructure Partners Limited, GIC Private Limited, British Columbia Investment Management Corporation, Qatar Investment Authority.

Other parts of the breakup:

  • Global Infrastructure Management, Canada Pension Plan Investment Board, CIC Capital Corporation, Global Infrastructure Management and British Columbia Investment Management Corporation will acquire the Pacific National rail business.
  • Brookfield Infrastructure, Global Infrastructure Management, British Columbia Investment Management Corporation and the Qatar Investment Authority will get the Bulk & Automotive Ports Services Business including the 50% shareholding interest in Australian Amalgamated Terminals (AAT).
  • Qube also has the right to acquire Asciano’s 50% shareholding interest in AAT from Brookfield Infrastructure for $150 million, subject to clearance by the competition watchdog the ACCC.

Qube also announced an $800 million equity raising, including a $306 million placement to Canada Pension Plan Investment Board at $2.14 a share. Qube shares last traded at $2.24.

“I believe the agreement we have now reached represents the most common sense resolution to the ownership of Asciano and delivers the best result for all stakeholders,” says Qube managing director Maurice James.

“We look forward to working with Asciano to complete this Transaction and to welcoming Brookfield as our new joint venture partner.”

Corrigan, chairman of Qube, was the managing director of the Patrick Corporation, which essentially owned Qube’s containers terminals, until it was taken over in 2006.

With the backing of the John Howard federal government, Corrigan transformed Australia’s waterfront in the late 1990s using lockouts and strike breakers to smash a union hold on the supply of labour.

The latest deal needs regulatory approvals from the the ACCC and the Foreign Investment Review Board.

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