PE firms still interested in Australian transport infrastructure group Asciano

23 October 2008

Asciano Ltd, Australia's biggest port and rail operator, said a private equity consortium led by Texas Pacific Group (TPG) may seek further discussions with the company after being rebuffed on a A$2.9 billion ($1.9 billion) approach earlier this year.

Asciano is trying to sell assets to help pay down debt and fund growth after spurning a tentative offer worth A$4.40 a share from TPG Capital and Global Infrastructure Partners (GIP) in August. That offer was described at the time as "indicative" and "non-binding". However, at that point of time Asciano told its suitors the non-binding indicative offer was not high enough.

The company said TPG and GIP had contacted the company on Monday this week and may seek to have further discussions in the future, but nothing had been agreed.

"The board absolutely believes that the current market price of Asciano securities in no way reflects the underlying value of Asicano's businesses, in the same way that the indicative offer from TPG and GIP failed to recognize that true value," vhairman Tim Poole said in remarks prepared for Asciano's annual meeting.

Commenting on the earlier offer, he said, ''Our sense at the time, back in August, was that they had done a reasonable amount of work on Asciano and that they would continue to be interested in our business. But most private equity firms don't do hostile transactions. They like to work with companies, and my sense of the discussion is that they like to have a friendly dialogue with us. And that's where we left it.''

Asciano shares jumped 4 per cent to A$2.81, defying a 1.8 per cent fall in the broader market. But its shares have fallen 61 per cent so far this year, nearly twice as much as the broader market.