ASCIANO LTD Asciano Limited (ASX: AIO, OTCUS: AIOYY) (Asciano) announces that it has received the attached non-binding indicative proposal from Qube Holdings Limited (Qube), Global Infrastructure Partners (GIP) and Canada Pension Plan Investment Board (CPPIB) (the Qube Consortium) to acquire all of the issued share capital of Asciano not already owned by the Qube Consortium at an implied value of A$9.25 per Asciano share.
The Asciano Board is considering this proposal.
In the absence of any superior proposal capable of acceptance, the Board continues to unanimously recommend the Brookfield proposal announced on 9 November 2015.
The Asciano Board remains committed to maximising value for Asciano shareholders and will continue to keep the market informed of any material developments.
Further Information
Asciano shareholders can obtain further information by contacting the Asciano Shareholder Information Line on 1300 729 310 for shareholders located in Australia, and +61 3 9415 4608 for shareholders located outside Australia.
For further information, please contact:
Investors and analysts | Media |
Kelly Hibbins | Richard Baker |
tel: +61 2 8484 8046 | tel:+61 2 8484 8103 |
mobile: +61 414 609 192 | mobile: +61 408 985 008 |
email: kelly_hibbins@asciano.com.au | email: media@asciano.com.au |
- Ends -
Investor and Analyst Enquiries:
Kelly Hibbins
Phone: + 61 2 8484 8046
Email: Kelly_hibbins@asciano.com.au
Media Enquiries:
Richard Baker
Phone: + 61 408 985 008
Email: media@asciano.com.au
Malcolm Broomhead Chairman
Asciano Limited
Level 6, 15 Blue Street North Sydney NSW 2060
Dear Malcolm,
Oube Holdings Limited ('Oube'), Global Infrastructure Management, LLC (on behalf of itself and its managed funds and clients) ('GIP') and Canada Pension Plan Investment Board ('CPPIB') (collectively the 'Consortium') are pleased to submit a confidential, non-binding indicative proposal ('Proposal') for the acquisition of all of the issued share capital of Asciano Limited ('Asciano' or the 'Company') not already owned by the Consortium, for an aggregate implied value of A$9.25 per Asciano share ('Proposed Transaction').
The Proposal represents superior value to the conditional scheme of arrangement and conditional proposed takeover offer announced by Brookfield Infrastructure Partners L.P. ('Brookfield'), particularly given the 'red light' issues announced by the Australian Competition and Consumer Commission ('ACCC') on 15 October 2015. The Proposal involves Asciano Shareholders receiving a mixture of cash and Oube shares, thereby allowing shareholders to retain an exposure to Asciano's container terminal businesses, including the upside potentially available from Asciano's container terminal businesses being combined with Oube and operated by Australia's most successful port logistics management team.
The Consortium currently holds an interest in 194,979,591 Asciano shares, representing 19.99% of Asciano's total shares outstanding.
Under the Proposal, Asciano shareholders will receive A$9.25 per share (comprising approximately 75% cash, with the balance in Oube shares) for every Asciano share held (the 'Consideration'), less the value of any cash dividend declared by Asciano prior to Proposed Transaction being implemented. The Consortium notes the current plan, in respect of the Brookfield scheme and potential takeover offer, to distribute Asciano's franked dividends to shareholders and confirms it would be comfortable with a similar arrangement that could be developed in consultation with Asciano. We believe that the Proposal represents a compelling proposition for Asciano's shareholders against a number of relevant benchmarks, namely, the implied value of the Proposal of A$9.25 per share:
Represents a significant premium to recent trading levels including:
39.1 % premium to Asciano's closing price prior to confirming Brookfield's initial approach on 1 July 2015, of A$6.65
40.0% premium to Asciano's 1 month VWAP prior to confirming Brookfield's initial approach on 1 July 2015, of A$6.61
40.5% premium to Asciano's 3 month VWAP prior to confirming Brookfield's initial approach on 1 July 2015, of A$6.58
22.4% premium to Asciano's closing price prior to the Consortium completing its off-market acquisition on 29 October 2015, of A$7.56
Is at the upper end of the Independent Expert's valuation range of A$8.42 to A$9.40 per Asciano share as disclosed in the Brookfield scheme booklet.
Is 15c per share above the implied average Brookfield offer consideration of A$9.10 based on the VWAP of Brookfield units since entry into the scheme implementation deed on 18 August 2015.
Is 45c per share above the price (A$8.80 per share) at which shareholders sold approximately 35% of the Company to both the Consortium and Brookfield in acquiring their respective stakes.
The Proposal is based on the Consortium's review of the Company's current fully diluted share capital, financial position and operating performance as disclosed in publicly available information.
The Proposal is subject to the fulfilment of a number of customary conditions, which are set out further below.
Transaction structureIt is the intention of the Consortium for GIP and CPPIB to acquire the rail business of Asciano and for Oube to acquire Asciano's Patrick container terminal business and interest in Australian Amalgamated Terminals ('AAT'). The Consortium is willing to consider a range of options to implement the Proposed Transaction including (but not limited to) a scheme of arrangement, takeover offer or asset sale and selective capital reduction.
Benefits of the Proposed TransactionThe aggregate consideration is valued at a substantial premium to the pre-Brookfield approach pricing benchmarks as noted above.
The cash component of the consideration provides attractive value certainty and liquidity to Asciano shareholders. Through the scrip consideration, Asciano shareholders will have the opportunity to participate in the growth opportunities of Oube, a leading Australian provider of import/export logistics seNices, well placed to benefit from the acquisition of a highly complementary portfolio, with synergies expected from the Proposed Transaction. In addition, Oube has a highly respected management team with significant operational expertise and knowledge of the Asciano assets.
Most importantly, the Consortium's Proposal provides Asciano shareholders with a greater likelihood of actually realising a premium for their investment in Asciano. The ACCC has raised 'red light' issues with regards to Brookfield's ownership of Asciano's Pacific National business, creating a significant risk that the Brookfield consortium's proposed scheme or potential takeover will not be able to proceed in their current form. The Consortium believes that it has in place an effective strategy to address any regulatory risks to its Proposed Transaction. As discussed below, the Proposed Transaction is not anticipated to be subject to an ACCC condition.
The Consortium's Proposal also benefits Asciano shareholders in that they would not be exposed to the significant risks associated with Brookfield's business and operations, and with Brookfield interests and COis, many of which are described in the Company's scheme booklet in relation to the Brookfield scheme. In particular, the Brookfield proposal involves Asciano shareholders receiving relatively illiquid securities with a materially different risk profile, governance and management structure to their current investment in Asciano, and without the opportunity to directly share in the synergies likely to flow from the Consortium's Proposal, as well as access to franking credits in the future.
ConditionsThe Proposal is subject to conditions, including:
Satisfactory completion of confirmatory due diligence. The Consortium will work constructively with Asciano to expedite its confirmatory due diligence with the aim of completing this by mid-December. The Consortium has
undertaken significant work prior to submitting this Proposal and is confident of its ability to progress its confirmatory due diligence
Execution of an implementation deed on terms acceptable to the Board of Directors of Asciano and Oube and the Investment Committees of GIP and CPPIB. The implementation deed would include the following provisions, which are no less favourable to Asciano than the amended implementation deed agreed with the Brookfield consortium:
Unanimous recommendation of the Company's Board of Directors;
Standard no restraints conditions;
FIRB1 and 010 approval;
Material third party consents (if any) to relevant change of control restrictions in Asciano's contractual arrangements (to be determined during confirmatory due diligence);
No prescribed occurrences (including no dividend or capital returns or material asset sales or acquisitions of joint ventures made or agreed to by Asciano until completion (other than those contemplated as part of the Proposed Transaction)) or material adverse changes having occurred for Asciano or Oube until completion; and
Customary exclusivity provisions and a break fee of 1 % of equity value.
Unlike the scheme of arrangement or takeover agreed with the Brookfield consortium, the Proposed Transaction is not anticipated to be subject to an ACCC condition.
Any final proposal will be conditional on approval from the Board of Directors of Oube and the GIP and CPPIB Investment Committees.
The Consortium comprises Oube, GIP and CPPIB, each of whom have a strong track record of efficiently and promptly executing material transactions, including public market transactions. The Consortium members are logical and credible acquirors of the Company, with a focus on best practice in operations and stakeholder engagement.
Oube (ASX Code: OUB) is Australia's largest integrated provider of import and export logistics services with national operations that provide a broad range of services. Listed on the ASX with a market capitalisation of -A$2 .4 billion (as at 6 November 2015), Oube operates divisions covering automotive, bulk and general stevedoring, landside logistics and strategic development assets. For more information about Oube, visit www.qube.com.au.
GIP is a leading global, independent infrastructure investor that combines deep industry expertise with industrial best practice operational management. GIP targets investments in single assets and portfolios of assets and companies in power and utilities, natural resources infrastructure, air transport infrastructure, seaports, freight railroad, water distribution and treatment and waste management. GIP has offices in New York and London, with an affiliate in Sydney and portfolio company operations headquarters in Stamford, Connecticut. GIP manages approximately US$15.4 billion for its investors. For more information about GIP, visit www.global-infra.com.
CPPIB is a professional investment management organisation that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 18 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and Sao Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at
Note that FIRS has already approved the Consortium acquiring up to 20% of the shares in the Company.
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