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Port operator Asciano has received a $9 billion takeover offer from Brookfield Infrastructure Partners.
The cash-and-scrip offer values Asciano at $9.05, a 36 per cent premium to the $6.65 the company was trading at on Wednesday. Asciano shares rose 21 per cent to $8.06.
The Australian Financial Review's Street Talk column revealed on Wednesday that Brookfield was holding talks with Asciano with regards to its Patrick container ports division and had received an indicative and non-binding approach in recent weeks.
Goldman Sachs is advising Asciano while it's understood Brookfield, Canada's largest alternative asset manager, is yet to appoint an adviser but has been touch with potential lenders, including Citigroup.
"For Asciano shareholders, a takeover approach reinforces the underlying quality of the assets and their value," Marcus Fanning, head of Australian equities at Colonial First State Growth's team and an Asciano shareholder, told The Australian Financial Review.
"Obviously, until we see the details of the offer, in particular the scrip component, it's premature to opine on the attractiveness of this offer and the prospects for other parties to enter the fray," Mr Fanning added.
UBS Global Asset Management head of Australian equities Jakov Males, who has been overweight Asciano for a number of years, said the company was being rewarded for investing at a time when other companies were looking to cut capital expenditure and focus on dividends.
"We think it is worth a little bit more than what they [Brookfield] bid," Mr Males said on Wednesday.
"They are very unique assets that operate in oligopolies where the company is generally the dominant party.
"The company has been making investments in recent years which are going to start paying off in the future. Whereas most investors were looking for companies that were cutting capex and paying out dividends and running buybacks, you had a company here that was doing the opposite and investing in an accretive way."
Asciano announced it had received the indicative, non-binding and conditional approach last week, on June 26.
The offer was made up of both cash and scrip. It's understood Brookfield offered Asciano shareholders units in the US-listed Brookfield Infrastructure Partners, as well as cash.
This article first appeared on www.smh.com.au
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