Canada’s Brookfield Infrastructure (BIP.N) said it will buy Australia’s rail freight firm Asciano Ltd (AIO.AX) in a deal valued at about A$12 billion (US$8.84 billion).
Asciano shareholders will receive A$6.94 in cash and A$2.21 in Brookfield Infrastructure Ltd Partnership units for every share held, which works out to A$9.15, Brookfield said on Monday.
The offer is a 13 percent premium to Asciano’s last traded price of A$8.11. Asciano had requested a trading halt on Monday.
The deal, which would be the seventh largest buyout of an Australian firm by an overseas entity, would underscore the huge international appetite for Australia infrastructure.
Record low interest rates have added to the M&A appeal of a sector already struggling with lower valuations because of a downturn in coal exports.
Asciano shares have traded at a discount to Brookfield’s indicative offer price since the target disclosed the approach on July 1, as investors question whether the Australian firm will submit to a takeover just as it starts to benefit from a A$3 billion equipment overhaul.
Fairfax Media had reported the deal earlier.
Asciano is expected to post a net profit of A$392 million for the year to June 30 on Tuesday, according to the average forecast of 16 analysts polled by Thomson Reuters Starmine, its highest since being spun off by Toll Holdings in 2007.
Earlier this year, Asciano’s former parent company, Toll Holdings, agreed to a A$6.5 billion takeover by Japan Post Holdings Co Ltd (IPO-JAPP.T).
Brookfield Infrastructure Partners was established by Brookfield Asset Management (BAMa.TO), a global asset manager with over US$200 billion of assets under management.
(Reporting by Byron Kaye in Sydney; Additional reporting by Sneha Banerjee in Bengaluru; Editing by Miral Fahmy and Sriraj Kalluvila)
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