Asciano rejects private equity offers(4)

The troubled Australian transport infrastructure company is raising capital through a share sale, rejecting offers from private equity firms reportedly including TPG, Global Infrastructure Partners and The Carlyle Group.

Asciano, an Australian port and freight railroad operator, has put an end to a year of speculation about its future by disclosing plans to raise A$2 billion ($1.6 billion; €1.2 billion) through a share sale.

The company was earlier in talks with private equity firms interested in acquiring either part or whole if its business. The Carlyle Group, TPG and Global Infrastructure Partners (GIP) were reportedly three among four entities vying to acquire either part or all of Asciano’s business. The company was expected to announce the preferred bidder by 30 June. However, the offers made have been rejected by Asciano, Reuters reported.

The company is instead raising capital through an issue of new shares to raise at least A$2 billion. It is selling the one-for-one rights offer at A$1.10 per share, at a discount of about 40 percent to the last traded share price of A$1.83.

In August 2008, Asciano rejected a joint takeover offer worth A$2.9 billion ($2.7 billion; €1.7 billion) from TPG and GIP, saying that the offer was too low and undervalued the company’s business. The consortium was offering A$4.40 per share.

Subsequently in May, GIP reportedly left the TPG-led consortium to launch its own bid as it was interested in acquiring only parts of Asciano’s business while the TPG-led consortium wanted to acquire it fully.

Asciano owns and manages Pacific National rail operations and Patrick ports. Pacific National provides bulk haulage services for coal, grain and bulk industrial products, and has more than 600 locomotives and 14,000 wagons. Patrick’s ports and stevedoring business involves the operation of container terminals in four of Australian container ports.

Asciano has about A$4.9 billion in bank debt, of which about A$2.7 billion matures during fiscal year 2009-10, according to Reuters.

Asciano did not respond to a request for comment by press time.