Brookfield Asset Management is seeking to add ports and rail operator Asciano to its expansive Australian interests, which already include Brookfield Rail, construction giant Brookfield Multiplex, half of oil and gas producer Quadrant Energy, and multiple city office towers.
Brookfield and Asciano - which owns the Pacific National rail business and the Patrick stevedoring business - issued statements today confirming a takeover proposal was made last week.
The cash and scrip proposal values ASX-listed Asciano at $9 billion, or $9.05 per share, a 36 per cent premium to its current share price.
Asciano said discussions were at an early stage and there was no certainty that a deal would be done.
"The board, together with its advisers, concluded that it was in the interests of its shareholders to engage further with Brookfield on an exclusive basis to progress the proposal," Asciano said in a statement.
"The board also notes that this disclosure may result in Brookfield withdrawing its proposal.
"If the proposal does not proceed, the board believes that Asciano has a very attractive independent future and that the company is well positioned to continue to deliver strong growth."
The proposal was made by New York stock exchange-listed Brookfield Infrastructure, and its institutional partners.
Brookfield Infrastructure was established by Toronto-based Brookfield Asset Management, and is managed by Brookfield Asset Management.
In a statement, Brookfield Infrastructure said the proposal was indicative, non-binding and conditional and that exclusive discussions with Asciano were ongoing.
"There can be no assurance that a transaction will be completed," the Brookfield statement said.
Brookfield Infrastructure's existing businesses include Brookfled Rail, which owns the 5,500-kilometre rail network in the South West of Western Australia, extending to Kalgoorlie and Esperance in the east.
The users of that network include Asciano subsidiary Pacific National, which is a national rail freight operator.
Asciano shares jumped nearly 17 per cent today to $7.77.
