Toronto-based asset manager Brookfield Infrastructure Group has made an AUD9 billion (USD6.9 billion) offer for Australia’s Asciano logistics company and its Patrick shipping container terminals.
In response to media speculation, Asciano asked the Australian Securities Exchange (ASX) on 1 July for a trading halt before confirming it had “received a confidential, indicative, non-binding, and conditional proposal” from Brookfield on 26 June.
The bid, however, has 12 weeks to finalise, with conglomerate China Merchants reportedly waiting in line as an alternative suitor.
Not all Asciano shareholders are happy with the cash-and-scrip offer, which amounts to half the purchase price in Brookfield shares and only half in cash.
“The board of Asciano, together with its advisors, concluded that it was in the interests of its shareholders to engage further with Brookfield on an exclusive basis to progress the proposal,” the company statement to the ASX said. “The board of Asciano notes that there is no certainty that the proposal will result in an offer for the company, what the terms of any offer would be, or whether there will be a recommendation by the board of Asciano.”
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The company also noted Brookfield could withdraw the offer. In this case, the company said it was well-positioned to continue to deliver strong growth independently.
Asciano’s Patrick terminals in Sydney’s Port Botany was expanded, renovated, and automated in June. The company also has a semi-automated terminal in Brisbane and two conventional terminals in Melbourne and Fremantle. Asciano boasts a half-share in Australia’s container trade.
Brookfield already owns the Dalrymple Bay coal terminal in Queensland, and has more than USD200 billion in assets worldwide.
Asciano reported an AUD3 billion debt in 2014. However, in May it announced that three new Liebherr cranes would be commissioned by October for its new four-quay automated 1.6 million teu Port Botany terminal.