Rival bidders for Australian rail and ports giant Asciano are considering making a joint, all-cash $9.05 billion bid in an effort to seal the long-running takeover battle.
Asciano on Tuesday said the two consortiums led by local logistics firm Qube and Canadian infrastructure giant Brookfield have held preliminary discussions for an all-cash offer at $9.28 a share.
Both consortiums each directly hold a stake of about 20 per cent in the target.
The move comes just days after Qube seemed to hold the upper hand in its fight for Asciano after winning favour for its $9.01 billion offer from the target company's board.
Qube, along with consortium partners Global Infrastructure Partners, Canada Pension Plan Investment Board and China Investment Corporation, had offered one Qube share and cash payment of $7.04 for every Asciano share held.
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Brookfield failed to match or beat Qube's offer by the February 15 deadline, but had promised a higher, all-cash offer once funding arrangements were in place.
Asciano, which handles nearly half of all container traffic entering or leaving Australia and owns the Pacific National rail freight business, is seen as a coveted infrastructure acquisition for sovereign and pension funds.
News about a potential joint proposal surprised the market, sending shares in both the target and suitor higher. Asciano shares closed up 14 cents at $9.01 while Qube surged 20 cents to $2.21.
"The new proposal would represent a common sense outcome which I believe would deliver the best result for all stakeholders," Qube's managing director Maurice James said.
Under the broad new proposal, Qube and the Brookfield-led consortium will jointly acquire the Patrick container terminal business for $2.92 billion in cash.
Asciano's main Pacific Rail business will be taken over by GIP, CPPIB, CIC and some of Brookfield's consortium partners.
The Brookfield consortium would also acquire Asciano's bulk, auto and ports services (BAPS) businesses for $925 million.
Qube said the new plan would allow it to generate synergies with the Patrick business, provide it benefits from joining hands with Brookfield, and cut its fundraising requirements for the deal.
The deal structure is also likely to address competition issues raised by the consumer watchdog, the companies said.
The Australian Competition and Consumer Commission on Tuesday said it has suspended its March 24 deadline for a decision on the previously announced competing proposals.
It will consider the new proposal when more details are available.
Asciano remained cautious about the development, saying while its board considered the potential deal attractive for shareholders, a number of steps would need to occur before any binding proposal could be reached.
The company said it will continue to recommend the existing $9.01 billion Qube proposal until a better deal is finalised.
