Brookfield in $8.84 billion deal for Australian freight firm Asciano
By Byron Kaye and Sneha Banerjee
(Reuters) - A group led by a unit of Canadian asset manager Brookfield Asset Management agreed to buy Australia's Asciano Ltd in a deal valued at $8.84 billion (£5.6 billion), creating a global rail, port and logistics business.
Brookfield Infrastructure Partners LP's A$12 billion deal, the seventh largest buyout of an Australian firm by an overseas entity, underscores the huge international appetite for Australian infrastructure.
Asciano's former parent company, Toll Holdings, agreed to a A$6.5 billion takeover by Japan Post Holdings Co Ltd [IPO-JAPP.T] earlier this year.
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 has a network of port and rail assets in Australia, including container terminal operations in Sydney, Melbourne and Brisbane. The company also offers rail freight services through its Pacific National unit.
"Combining Asciano's Australian container terminals with our existing assets in North America and Europe provides the foundation for a global container platform," said Brookfield Infrastructure Chief Executive Sam Pollock.
The deal will also create a "powerful" international rail logistics business, he said.
Brookfield Infrastructure's assets in Australia include the Dalrymple Bay Coal Terminal in Queensland and a freight rail network.
Asciano shareholders will receive A$6.94 in cash and 0.0387 Brookfield Infrastructure Ltd partnership units for every share held, Brookfield said on Monday.
The offer has an implied value of A$9.15, a 13 percent premium to Asciano's last traded price. Asciano had requested a trading halt on Monday.
Brookfield Infrastructure's shares were down 3.5 percent at $40.57 in afternoon trade on the New York Stock Exchange. They fell as much as 7 percent earlier.
Monday's offer is also higher than Brookfield's previous bid, which had an implied value of A$9.05 per share.
Brookfield Infrastructure will get a 55 percent stake in Melbourne-based Asciano for a $2.8 billion investment.
Other Brookfield-led private funds will hold about 23 percent and two institutional partners will each hold about 11 percent.
Asciano shares have traded at a discount to Brookfield's indicative offer since news first broke of the bid on July 1.
Asciano is expected to post a net profit of A$392 million for the year to June 30 on Tuesday - the company's highest since being spun off by Toll Holdings in 2007- according to the average forecast of 16 analysts polled by Thomson Reuters StarMine.
($1 = 1.35 Australian dollars)
(Reporting by Byron Kaye in Sydney; and Sneha Banerjee in Bengaluru; Editing by Miral Fahmy and Sriraj Kalluvila)
