Asciano soaring on $ 9b takeover offer
AUSTRALIA’S largest rail and freight operator Asciano is set to fall into foreign hands after North American giant Brookfield lobbed a near $ 9 billion takeover offer its way.
It would be the biggest takeover in Australia since SABMiller swallowed beverages giant Foster’s for $ 12.3 billion in 2011.
Brookfield’s interest in a minority stake in Asciano’s Patrick ports and stevedoring business was already known, but yesterday’s complete take- over offer was a shock.
Investors reacted positively, sending Asciano’s stock up more than 20 per cent during the day before closing $ 1.12, or 16.8 per cent, higher at $ 7.77.
That is below Brookfield’s cash and scrip offer, which is indicative, non- binding and conditional and values Asciano shares at $ 9.05 and the company at nearly $ 8.8 billion.
If it went ahead, it would only need 50 per cent support from shareholders.
Brookfield, a Canadianbased US- listed infrastructure giant with $ 200 billion in assets under management, would get access to half of Australia’s container freight and rail freight network through an Asciano takeover.
Asciano said in a statement that it would engage with Brookfield as the latter completed due diligence.
Brookfield, which owns construction group Multiplex in Australia, would only say that talks were ongoing.
For Asciano the offer, at a 36 per cent premium to Tuesday’s closing shareprice, is attractive, said IG market strategist Evan Lucas.
“It probably does them a world of good; they have been struggling and looking to get out of Patrick anyway. It has not been advantageous,” he said.
One negative for retail shareholders that might be holding back the shareprice, said Mr Lucas, was the scrip component, which meant “mum and dad” investors would have to sell Brookfield’s foreign shares to get cash, which can be slow.
Patrick is profitable but has a long history of industrial strife, from the recent auto- mation of the Port Botany container terminal to the bitter 1998 waterfront dispute in Sydney and Melbourne.
Asciano is often described as an economic barometer, given the wide range of products it transports.
Any takeover deal would require Foreign Investment Review Board approval, with Asciano’s port and rail businesses strategically important.
Chief executive John Mullen said in February that Australia’s economic malaise was making it difficult to grow earnings.