Qube Up The Ante

The latest move by Qube looks like strengthening the company’s position in the transport sector. Qube is reported to have raised the money on offer in its takeover bid for Asciano, owner of Patrick and major port and rail assets. The bid would be worth $9 billion and reports suggest Asciano insiders would prefer the Qube offer to the other one on the table, from Canadian rail operator, Brookfield.

 

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Qube has upped its offer for Asciano to $9.24 per share, this is higher than its original $9.17 offer and above the bid made by Brookfield of $9.10.

 

“The Asciano Board has determined that the Qube Consortium’s Revised Proposal is a superior proposal,” Qube said in a statement to the ASX.

 

To make its offer work, Qube is working with two entities, Global Infrastructure Management and the Canada Pension Plan Investment Board. The plan is for Qube to take ownership of the Patrick port terminal business, while GIM and CPPIB take on the ownership of the Pacific National rail business.

 

The earlier takeover bid, from Brookfield, had attracted the interest of the Australian Competition and Consumer Commission (ACCC). This is because it would result in the company owning both the rail track and the trains running on it, in some areas, which has been seen as an obstruction to a free market in the past.

 

The Qube bid could see the return of a familiar face in the ports world. Chris Corrigan became a well known face on the TV sets of Australia during the long waterfront dispute with his Patrick Corporation locking horns with the Maritime Union of Australia from June 1997 through to June 1998.

 

Seven years later, Corrigan was back in the news with Patrick fighting long and hard (over nine months) to resist Paul Little’s Toll taking control of the ports giant. When the dust settled two entities Toll and Asciano had swallowed up Patrick and Corrigan left the public stage. He would reappear sometime later, in 2010, when the Qube Logistics was formed and included the port elements of P&O.

 

A decision by the Australian Competition and Consumer Commission looked to have improved the chances of Qube taking over Asciano, by rejecting the proposal by Brookfield, citing concerns about the company’s long term behavioural undertakings.

 

This proposed takeover by Qube follows the takeover of Toll by Japan Post, for $6.5 billion, last year. A Qube deal could mean the Toll transport business, built by Paul Little, alongside Peter Rowsthorn and his son Mark, coupled with the Patrick business built by Chris Corrigan, will be selling inside a year for a combined total of over $15 billion.

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Author: Tim Giles

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