Qube reveals CIC part of bid for Aussie rail giant
Print Edition
AUSTRALIAN port operator Qube Holdings Ltd said yesterday that a Chinese sovereign wealth fund is taking part in its A$8.9 billion (US$6.3 billion) bid for rail giant Asciano Ltd, potentially complicating regulatory approval amid a political backlash against Chinese investors.
Qube revealed the participation of China Investment Corp as it made the binding cash-and-share offer for Australia’s largest rail freight network, which narrowly bests an offer from Canadian infrastructure giant Brookfield Asset Management Inc.
Qube also set out a plan to split Asciano’s business if the deal is approved: Qube would have most of the ports business while its offshore co-investors — CIC, the Canada Pension Plan Investment Board and Global Infrastructure Management — would own the rail business.
Asciano said in a statement that its board is considering the Qube offer but continues to support the Brookfield offer.
Australia’s anti-trust regulator has raised concerns about a Brookfield takeover of Asciano, as both firms control sizeable rail assets across the country.
CIC’s involvement in the Qube offer could also run into difficulties with the Foreign Investment Review Board at a time when opposition politicians have criticized Prime Minister Malcolm Turnbull’s government over asset sales to Chinese investors.
Last year, the FIRB blocked the sale of an Australian cattle ranch to Chinese firms on the grounds of national interest after politicians raised security concerns about the lease of the northern Port of Darwin to Chinese-owned firm Landbridge.
Peter Jennings, executive director of think tank Australian Strategic Policy Institute and a former defense department official, said the board would likely base its decision on whether CIC would have any management or board involvement in the joint entity.
Qube managing director Maurice James said he expected the company’s offer would get regulatory clearance since “the business that’s being acquired is an operating interest (and) CIC has no interest in any activity in this space.”
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