Asciano : Recommends Qube Consortium Proposal

722e5eb4-45f4-428b-ac91-6f326b492fec.pdf

Date: 16 February 2016

ASCIANO RECOMMENDS QUBE CONSORTIUM PROPOSAL

Asciano Limited (Asciano) (ASX:AIO, OTCUS:AIOYY) announced on 8 February 2016 that it had received a revised proposal from Qube Holdings Limited (Qube), Global Infrastructure Partners (GIP), Canada Pension Plan Investment Board (CPPIB) and CIC Capital Corporation (CIC Capital) (together, the Qube Consortium) to acquire up to 100% of the issued capital of Asciano (Qube Consortium Proposal).

Expiration of matching right period

As required under the amended Bid Implementation Deed between Asciano and Brookfield Infrastructure Partners Limited (Brookfield Infrastructure) dated 9 November 2015 (Brookfield BID), Asciano issued a notice to Brookfield Infrastructure on 8 February 2016 providing Brookfield Infrastructure with a right to submit, within five business days, a matching or superior proposal to the Qube Consortium Proposal.

The matching right period concluded at the end of Monday, 15 February 2016. Brookfield Infrastructure did not submit a matching or superior proposal within this period.

Change in Asciano Board recommendation

As previously announced, the Asciano Board has determined that the Qube Consortium Proposal is superior to the proposal from Brookfield Infrastructure announced on 9 November 2015 (Brookfield Offer). The Asciano Board has considered the Qube Consortium Proposal and the Brookfield Offer and unanimously recommends the Qube Consortium Proposal to Asciano shareholders.

The Asciano Board recommends that Asciano shareholders accept the takeover offer to be made under the Qube Consortium Proposal in respect of all of their Asciano shares, subject to:

• Asciano not receiving a superior proposal; and

• an independent expert opining that the takeover offer and the sale of each of the Ports and BAPS businesses is fair and reasonable to Asciano shareholders.

Investor and Analyst Enquiries:

Kelly Hibbins

Phone: + 61 2 8484 8046

Email: [e-mail]

Media Enquiries:

Richard Baker

Phone: + 61 408 985 008

Email: [e-mail]

Asciano has now signed binding transaction documentation with the Qube Consortium including an implementation deed in relation to the takeover offer (Qube Consortium Implementation Deed), together with sale agreements in relation to Patrick's container terminal business and a 50% interest in Australian Amalgamated Terminals (Ports) and the Bulk & Automotive Port Services businesses and a 50% interest in ACFS Port Logistics (BAPS).

The Brookfield BID will now be terminated and the Brookfield takeover bid is expected to lapse at 7.00pm on 18 February 2016. Asciano will also apply to the court for orders to cancel the Scheme Meeting in respect of the Brookfield Offer.

As a result of the change in recommendation in favour of the Qube Consortium Proposal, a break fee of A$88 million will be paid to Brookfield Infrastructure. Asciano will treat the break fee as a material item of A$88 million pre tax (A$61.6 million after tax) in its FY16 full year financial results.

Overview of the Qube Consortium Proposal

As announced on 8 February 2016, the Qube Consortium Proposal involves GIP, CPPIB and CIC Capital, through a jointly owned bid vehicle (BidCo) is making an off-market takeover bid to acquire all of the shares in Asciano for consideration of A$7.04 cash (including the amount of permitted dividends) and 1 Qube share per Asciano share.

If ATO approval is obtained in respect of the special dividend, Asciano is permitted to pay fully-franked dividends of up to A$0.97 per share (Permitted Dividends), in aggregate, comprising an interim1 and special dividend, to enable franking benefits of up to A$0.416 per share to be distributed to eligible

Asciano shareholders.2 To the extent that Permitted Dividends are paid, the A$7.04 cash component

of the consideration will be reduced by the amount of the Permitted Dividends.3 The Qube Consortium Proposal currently has an implied value of:

• A$9.025 per Asciano share based on Qube's closing price of A$1.985 on 15 February 2016;

• A$9.17 per Asciano share based on the volume weighted average of Qube's shares for the 30 trading days leading up to and including 15 February 2016.

  
  

  The implied offer value (including the amount of the permitted dividends) represents a 35.7% premium to the undisturbed Asciano share price on 30 June 2015 (the day prior to the announcement of receipt of the initial Brookfield proposal) and an EV/EBITDA multiple of 10.4x for the year ended 30 June 2015.4

  
  

  Under the Qube Consortium Proposal, Qube will acquire 100% of Ports for an enterprise value of A$2,650 million and BAPS will be sold to an entity to be established and owned initially by GIP, CPPIB and CIC Capital (BAPS HoldCo) for an enterprise value of A$850 million. BAPS HoldCo will seek to sell the BAPS businesses to a third party or parties. Qube may also seek to acquire certain of the BAPS assets, subject to regulatory approvals. The sale of Ports and BAPS is subject to approval of the shareholders of Asciano, ACCC approval and the takeover offer by BidCo becoming unconditional. The proceeds from the sales of Ports to Qube and BAPS to BAPS HoldCo (net of any funding

  obtained by Asciano to fund the Permitted Dividends) will be returned to Asciano shareholders who do not accept the takeover offer by way of a pro rata capital return5 after the takeover completes.

  
  

  1

  The interim dividend is not subject to an ATO ruling.

  2

  Whether a shareholder is able to capture the full benefit of the franking credits will depend on their personal tax

  circumstances, including whether they satisfy relevant holding period rules.

  3

  The quantum of any dividends paid will be determined by the Asciano Board, but will not exceed a level that may be fully

  franked based on available franking credits, which may be less than A$0.97 per Asciano share.

  4

  Based on offer consideration of A$9.025 per share based on the Qube closing price of A$1.985 on 15 February 2016 and

  Asciano net debt of A$3.1bn as at 30 June 2015.

  5

  An ATO ruling will be sought in relation to the proposed capital return, which will determine its composition including the

  dividend component, if any.

  The Qube Consortium Proposal is subject to a number of key terms including (among others):

  
  

• Conditions precedent including:

  • Minimum acceptance condition of 50.1% of Asciano shares on issue;6

  • Regulatory approvals (FIRB, ACCC, NZ OIO, European Commission, and any required ASIC or ASX approvals);

  • no Asciano prescribed occurrences or material adverse change occurring;

• Approval by ordinary resolution of Asciano shareholders of the sale of Ports and BAPS and the payment of net proceeds to Asciano shareholders who do not accept the takeover offer by way of a pro rata capital return;

• Exclusivity provisions (including no shop and no talk, fiduciary exception, notification of approaches, matching right); and

• Break fee equal to A$88 million payable upon a change of control of Asciano or a material breach by Asciano of the terms of the Qube Consortium Implementation Deed.

Further details are contained in the Qube Consortium Implementation Deed which is set out in full in Annexure A.

Next steps and further information

Asciano shareholders do not need to take any action at the present time.

The Qube Consortium expects to release a Bidder's Statement and Asciano expects to release a Target's Statement and Notice of Meeting containing further details and information regarding the takeover offer and the sale of Ports and BAPS in the coming weeks.

Asciano shareholders can obtain further information by contacting the Asciano Shareholder Information Line on 1300 729 310 for shareholders located in Australia, and [phone] for shareholders located outside Australia.

For further information, please contact:

Investors and analysts	Media
Kelly Hibbins	Richard Baker
tel: [phone]	tel:[phone]
mobile: [phone]	mobile: [phone]
email: [e-mail]	email: [e-mail]

- Ends -

6

Includes the relevant interest held by the Qube Consortium.

ANNEXURE A