This threatens to derail Brookfield’s push to buy Asciano via a scheme of arrangement that values the port and rail player at about $A12 billion.
Of keen interest to the mining industry are some of the assets involved in the Brookfield-Asciano deal.
Asciano has rail operator Pacific National. It operates on Brookfield’s rail network in Western Australia and carries coal to Brookfield’s Dalrymple Bay Coal Terminal in central Queensland.
Earlier this month the ACCC released a Statement of Issues on Brookfield’s proposed Asciano acquisition. One of the main points was that market participants had raised strong concerns about Brookfield’s ability and incentive to favour Pacific National through its Brookfield Rail and DBCT businesses.
“The ACCC is concerned the vertical integration will lead to a substantial lessening of competition in related markets for the supply of above rail haulage services in WA and Queensland,” ACCC chairman Rod Sims said.
That is not so much Qube’s concern but it does interest its co-investors Global Infrastructure Partners and Canada Pension Plan Investment Board.
GIP and CPPIB have entered into the deal to take part in the ultimate ownership of the Pacific National rail business.
Qube says it wants a say in the ownership of Asciano’s Australian terminal assets.
It believes a combination of Qube with the Patrick Containers Terminal business as well as several assets in the bulk, automotive and general stevedoring businesses owned by Asciano has the potential to create significant value.
Qube has funded a 6.3% interest in Asciano by way of a total return swap with UBS. The remaining interest has been funded by GIP and CPPIB.
Qube’s management say they have no interest in buying any of Asciano’s businesses beyond the Patrick businesses at this time.
It, along with GIP and CPPIB intend to evaluate several options relating to Asciano including:
Not voting any Asciano shares in favour of the Brookfield takeover;
Entering into discussions with Brookfield and/or Asciano in relation to an alternative transaction to the scheme of arrangement involving the possible carve-up of Asciano assets; and
Holding a strategic stake in Asciano for a period of time that may include seeking board representation.
Qube has ties to the Patrick businesses. Its chairman Chris Corrigan was the former managing director of Patrick Corporation.
It believes the acquisition of the Patrick business would transform Qube, providing significant opportunities to improve the operations of the Patrick businesses by combining them with Qube assets.
