Daily Management Review

Qatar, China in $6.4 Billion Battle for Australian Freight Giant: Reuters


Qatar, China in $6.4 Billion Battle for Australian Freight Giant: Reuters
A fresh $6.4 billion bid for Australian port and rail firm Asciano is being planned by Canada's Brookfield Asset Management with assistance from Qatar's sovereign fund, Reuters reported citing sources. This development has increased the global battle that has been going on for some time now for the haulage heavyweight.
The immense appetite for Australian infrastructure, especially mining-exposed companies whose share prices have been battered by the commodities downturn has been underscored by the willingness of Brookfield to raise its offer and Qatar Investment Authority's entry as a potential co-investor.
The initial offer of A$8.9 billion ($6.3 billion) of Bookfield was dumped by Asciano on Tuesday. Asciano has a market capitalization of $4.3 billion a year ago. The Bookfield offer was turned down in favor of a A$9 billion bid from Australian freight rival Qube Holdings Ltd in concert with China Investment Corp.
However sources told Reuters that the Canadian infrastructure investor, who are close to the deal, would raise its offer to A$9.05 billion as early as Thursday with help from the Qataris and Canadian pension fund PSP Investments.

The sources asked not to be identified because of the sensitivity of the matter.
The sources said that to allow for a higher cash offer with new partners, Brookfield always intended to allow its original binding offer to lapse by a February 17 deadline.
The sources said that it planned to raise its offer from A$9.10 per share to A$9.28 and it stood by its February 7 letter it wrote to Asciano.
Asciano and Qube declined comment and Brookfield had no official comment. QIA was not immediately available for comment.
The deal would be QIA's first in Australia. In recent years, the fund has taken up a 44 percent stake in a $4.5 billion Brookfield property development in Manhattan last year and it has been busy buying assets around the world.
A new dimension of scrutiny from Australia's Foreign Investment Review Board could be added by its emergence as a potential co-investor. The Chinese government interests backing its takeover offer could also lead to political headwinds for Qube.
Its assessments of whether deals were in the national interest were applied consistently "regardless of the country of origin of the investor", said a FIRB spokesman.
While Citi and Barclays is advising Brookfield, Qube is being advised by UBS and Credit Suisse.
Brookfield has lined up a A$1.9 billion loan underwritten by ANZ, Barclays, Citi, Deutsche Bank and HSBC.

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