Fundraising

IFM-led bid for Melbourne Port under review

The country’s competition watchdog is looking to assess whether a takeover would give IFM too strong a position in the Australian port sector.

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The Australian Competition & Consumer Commission is reviewing a bid from a consortium led by Australian fund manager IFM Investors for the 50-year lease of Port of Melbourne. 

The bidding team also comprises Dutch pension fund manager APG Asset Management and Macquarie Infrastructure and Real Assets (MIRA). 

IFM is poised to be the biggest partner in the consortium with a proposed 50-55 percent stake, with APG holding 25-30 percent and MIRA owning the remaining 20 percent. 

ACCC started a review of the proposed merger process on Wednesday. Interested parties are expected to submit their proposals by 17 June, followed by ACCC's announcement of a final decision on 28 July.   

ACCC's investigation is focused on the impact on competition in the context of the stakeholders' existing interests in port-related businesses. 

IFM already owns minority interests in Port Botany, Port Kembla and the Port of Brisbane, while APG and MIRA both have a range of indirect interests of less than 5 percent in port-related businesses.

One of the questions being raised by ACCC is whether the bid would lessen competition between the ports IFM already backs and the Port of Melbourne. 

The lease is valued at between $4 billion and $6 billion, which will exceed the book price, Premier Daniel Andrews said on a Bloomberg TV interview. He said the Victoria state is “very confident” with the auction. 

The IFM consortium will be up against a group of investors comprising Australia's QIC , New York-based  Global Infrastructure Partners and Canada's Borealis Infrastructure  as well as a consortium of Chinese investors led by a Zhejiang port group, according to reports. 

Another consortium including Australia's Hastings , Kuwait's Wren House Infrastructure and Canada's pension  Alberta  has reportedly dropped out of the bidding. 

The proceeds of the privatisation are earmarked for the development of a new Melbourne underground rail tunnel and the removal of 50 rail level crossings. This latter project is expected to cost up to $4.3 billion.