ACCC AWAITS AS QUBE AND BROOKFIELD JOIN FORCES

In the ongoing Asciano takeover saga, the ACCC has suspended its deliberations as Qube and Brookfield have announced they are likely to make a joint bid for Asciano.

The Australian Competition and Consumer Commission has suspended the review timelines for its consideration of both:

The proposed acquisition of Asciano Limited (ASX: AIO) (Asciano) by a consortium comprising Qube Holdings Limited (ASX: QUB), Global Infrastructure Partners, Canada Pension Plan Investment Board, and CIC Capital Corporation (Qube Consortium), and

the proposed acquisition of Asciano by a consortium assembled by Brookfield Asset Management Inc. that includes Brookfield Infrastructure Partners L.P (Brookfield Consortium).

This is due to the announcement of a potential transaction under which the Brookfield Consortium and the Qube Consortium would together facilitate the acquisition of 100% of the issued capital of Asciano.

The ACCC is awaiting further details of the new potential transaction and will update the ACCC public mergers register in due course:

In an ASX announcement, Qube advised that it is in discussions with Brookfield Infrastructure in relation to a $9.28 all cash proposal to acquire Asciano

Key highlights:

The existing Qube Consortium comprising Qube, GIP, CPPIB and CIC is in discussions with Brookfield Infrastructure and its partners and Asciano, in relation to a new all cash proposal to acquire Asciano for $9.28 per share by way of a scheme of arrangement.

The discussions remain indicative, preliminary and non-binding and there is no agreement, arrangement or understanding between the parties at this stage, but under the indicative terms of the proposal, Qube would acquire the Patrick Container Terminals Business in 50/50 joint venture with Brookfield and other members of the Brookfield consortium for $2,915 million (Qube's share: $1,457.5 million).

The Joint Venture would be expected to realise synergies consistent with the range previously identified by Qube, and also benefit from Brookfield's international container terminal footprint and other value that Brookfield would bring to the joint venture.

The New Proposal would provide a highly attractive outcome for all stakeholders. Qube expects it would continue to derive the significant benefits identified by Qube under the current recommended proposal from the Qube Consortium with approximately half the capital outlay.

The New Proposal is subject to agreement of binding documentation between the parties and with Asciano and to the receipt of any necessary ASIC relief. In the event such documentation is not agreed, the Qube Consortium Proposal which was unanimously recommended by the Asciano board on 16 February 2016 will continue in accordance with the terms of the Bid Implementation Deed.

The discussions remain preliminary, indicative and non-binding and there is no agreement, arrangement or understanding between the parties at this stage, however, under the indicative terms of the New Proposal, Asciano shareholders would receive all cash consideration of $9.28 per share. Consistent with the existing Qube Consortium proposal, Asciano would be permitted to pay fully-franked dividends to enable franking credits to be distributed to eligible Asciano shareholders. The consideration would be reduced by the amount of any dividends paid.

The indicative terms of the New Proposal are:

Qube, in a 50/50 joint venture with Brookfield Infrastructure and members of the Brookfield Consortium (or entities controlled by them), would acquire the Patrick Container Terminals Business (the "Patrick Container Terminals Business");

Brookfield Infrastructure and members of the Brookfield Consortium (or entities controlled by them) would acquire the Bulk & Automotive Ports Services businesses (including the 50% interest in Australian Amalgamated Terminals and related shareholder loans ("AAT")) (the "BAPS Business"). Qube would have an option to subsequently acquire from Brookfield Infrastructure the 50% interest in AAT, subject to ACCC clearance; and

GIP, CPPIB, CIC and certain members of the Brookfield Consortium other than Brookfield Infrastructure would acquire the Pacific National rail business ("Pacific National").

Subject to entering into binding transaction documentation with Asciano, the New Proposal would, if agreed, be implemented by way of a scheme of arrangement. The scheme would be subject to conditions consistent with those applicable under the existing Qube Consortium takeover proposal.

The parties will undertake negotiations as expeditiously as possible to determine whether the New Proposal can be developed. Unless and until such proposal is able to be developed, agreed documentation is entered into by all parties and any ASIC relief obtained, the Qube Consortium Proposal which was unanimously recommended by the Asciano board on 16 February 2016 will continue in accordance with the terms of the Bid Implementation Deed with Asciano.

Source: tandlnews