Ports and rail freight company Asciano has recommended the $9.1 billion Qube takeover bid, pushing aside the bid by Canada’s Brookfield Infrastructure.
Qube, chaired by ports veteran Chris Corrigan, is now offering $7.04 cash and 1 Qube share, an implied combined value of $9.24.
Asciano had invited Brookfield Infrastructure to improve its $8.9 billion offer.
Today, after Brookfield failed to match the bid, Asciano’s board recommended shareholders accept the bid by the Qube consortium — Qube Holdings Limited, Global Infrastructure Partners, Canada Pension Plan Investment Board and China’s CIC Capital Corporation.
Brookfield is now due a break fee of $88 million from Asciano.
The latest proposal would see Qube acquiring Asciano’s Patrick container terminal business and a 50% interest in the ports business Australian Amalgamated Terminals. This would cost Qube about $2.65 billion.
The other members of the Qube consortium would acquire the rail business of Asciano. The remaining bulk, auto and ports services businesses and 50% interest in ACFS Port Logistics Pty Ltd would be sold off.
Qube says combining Ports with Qube under a single ownership and management structure will generate an estimated $30 million to $50 million a year of benefits from synergies and business improvement projects over two to three years
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.
Shares in Qube were up 2.5% to $2.035.