After weeks of speculation, Qube Holdings Ltd (ASX: QUB) has launched a counter bid to Brookfield Infrastructure Partners' $9.10 per bid for the shares of Asciano Ltd (ASX: AIO) it does not already own.
Qube has formed a 'consortium' that includes Global Infrastructure Management LLC (GIP) and the Canada Pension Plan Investment Board (CPPIB), valuing Asciano shares at $9.25. Asciano shareholders stand to receive approximately 75% of the offer in cash, with the balance in Qube shares.
"The Proposal represents superior value to the conditional scheme of arrangement and conditional proposed takeover offer announced by Brookfield Infrastructure Partners L.P. ("Brookfield")", Qube's ASX announcement read.
Brookfield's takeover offer previously raised some, "red flags" from the ACCC, the competition watchdog. To this end, Qube says its offer, while attracting minimal ACCC review and conditionality, has been structured in a manner to be, "uncontroversial from a competition law perspective" since Qube is seeking to take ownership of select assets – not the entire group.
Under the proposed deal, Qube is seeking to acquire the Asciano's Patrick container terminal business and its interest in Australian Amalgamated Terminals. Qube's two partners will acquire Asciano's larger rail business. "Following implementation of the Proposed Transaction, Asciano (under GIP/CPPIB ownership) would continue to own and operate the Bulk, Automotive and Port Services business pending a sale process."
Although Qube's proposal may eliminate some regulatory concerns for Asciano shareholders, it'll also require Asciano's board to provide due diligence, so that the process can be progressed as quickly as possible.
The consortium hopes to have its due diligence completed by mid-December. Only then would an implementation deed with Asciano be entered. Qube said the consortium's implementation deed with Asciano would, "include provisions which are no less favourable to Asciano than the amended implementation deed agreed with the Brookfield consortium on 9 November 2015." Therefore, the consortium's offer is not legally binding and is subject to a number of conditions being met.
"The Asciano Board is considering this proposal," Asciano said in an ASX announcement. "The Asciano Board remains committed to maximising value for Asciano shareholders and will continue to keep the market informed of any material developments."
Foolish Takeaway
On the day of the company's Annual General Meeting, Asciano shareholders will likely be left scratching their heads following today's announcement. Indeed, although the Consortium's offer appears superior than Brookfield's it also seems more convoluted. However, the ACCC's "red flags" are another key area of uncertainty that shareholders must take into account when forming an opinion.
As we await further developments and the Asciano board decision, at least shareholders know they are holding a valuable asset.
