David Bonderman’s TPG Capital offered A$2.9 billion (US$2.7 billion) for Asciano Ltd, Australia’s second-biggest coal transporter, in the country’s largest leveraged buyout.
TPG and Global Infrastructure Partners offered A$4.40 a share cash for Asciano, 6 percent more than the closing price on Friday. Asciano declined to give TPG access to its finances because the offer undervalues the business, the Melbourne-based company said in a statement yesterday.
Shares of the Melbourne-based port and rail owner jumped 16 percent to A$4.83 at the close of trade in Sydney on speculation TPG will have to increase its bid. Buying Asciano will give TPG access to rising revenues from commodities transportation as Australia expands its ports and railways to meet demand from mining companies including BHP Billion Ltd and Rio Tinto Group after lifting exports.
“There’s going to be greater use of port facilities, expansions are under way, so it’s a growth area,” said Peter Rudd, a Melbourne-based analyst at Carroll, Pike & Piercy Pty. The offer will likely be raised, he said. “There’d be further upside I’d say, to bed it down.”
Asciano is the biggest provider of bulk and general stevedoring services and the second-largest coal transporter in Australia, the world’s top exporter of the commodity.
Private equity deals in the Asia-Pacific region have fallen 29 percent this year as the subprime mortgage market collapse curbed bank borrowings for acquisitions.
Exports of commodities from Australia, the world’s largest shipper of coal and iron ore, may rise to a record A$212 billion (US$198 billion) in the year ending June 30 next year, spurring demand for upgraded port and rail facilities as mining companies seek to meet China’s demand for raw materials.
Queensland Rail, Australia’s biggest rail transporter of coal, is spending A$3 billion to expand rail networks and buy more trains. Dalrymple Bay Coal Terminal Pty, Australia’s second-largest export harbor of the fuel, is undergoing a A$1.3 billion expansion.
Asciano jumped as much as 19 percent to A$4.92. The stock had slumped 40 percent before yesterday’s gain, compared with the 23 percent decline in the benchmark S&P/ASX 200 Index.
TPG Capital, the buyout arm of Bonderman’s Fort Worth, Texas-based TPG, managed more than US$50 billion as of April.
Toll, Australia’s biggest freight company, spun off Asciano last year to expand in Asia. Asciano provides bulk haulage services to the coal and grain sectors in Australia, according to its Web site. It transports about 95 million tonnes of coal a year and has more than 600 locomotives and 14,000 wagons, it said on its Web site.
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