The Australian government may order the country’s freight industry to restructure if port and rail giant Asciano Ltd is sold to Canada’s Brookfield Asset Management Inc, a rival bidder said on Tuesday.
Australian logistics business Qube Holdings Ltd is trying to give Asciano’s shareholders a reason to warm to its slightly higher indicative offer, which came after the target company had recommended Brookfield’s US$6.5 billion buyout.
Qube Chairman Chris Corrigan‘s warning of government intervention appears to be a bid to scare Asciano shareholders into avoiding extra costs and supporting his firm’s offer, made in a consortium with Canada Pension Plan Investment Board and Global Infrastructure Partners. Corrigan ran Asciano’s port unit for 16 years until it was sold in 2006.
“You do require the container terminal operators to service rail in an intelligent fashion. They’ll do that either at their own volition or they’ll be told to do it by government,” Corrigan told reporters in his first public remarks on the takeover offer.
“It’s more of a ‘steady-as-she-goes’ type of proposal from Brookfield.”
Qube has bought a one-fifth stake in Asciano, prompting Brookfield to buy a similar stake. That means each firm could deny the other full ownership.
Corrigan said Asciano had been considering an informal offer from Qube for its port business when Brookfield offered to buy the whole company.
“It wasn’t clear that Asciano was a seller of the entire business,” he said.
The Australian Competition Consumer Commission has raised antitrust concerns about Brookfield buying Asciano, and will give its final ruling on December 17.
Qube shares were down 0.8 percent and Asciano shares were down 0.2 percent, in line with a weaker market.
(Reporting by Byron Kaye; Editing by Stephen Coates)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
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