By Jenny Wiggins
Several big investors in logistics group Qube say they will back an $11.6 billion takeover offer from Macquarie’s asset management business, at the same time lamenting the potential loss of another big infrastructure company from the ASX boards.
Jamie Hannah, deputy head of investments and capital markets at VanEck, said that while the offer’s 28 per cent premium to Qube’s Friday closing price was reasonable, the investment group had not yet decided whether to accept it.
“There is demand for quality infrastructure companies in the public markets and losing another from the exchange also limits investment options,” Hannah said.
“Shareholders will need to weigh up the cash incentive against the ability to deploy the capital into other Australian infrastructure companies,” he added. VanEck holds almost 14 million Qube shares and is one of the company’s 15 biggest investors.
Steve Lambeth, portfolio manager at Clime Investment Management, said the indicative proposal of $5.20 per share in cash was fair and that the group would support the offer.
“We are cognisant that the price being offered is higher than what Qube has historically paid for many of the businesses it has acquired,” Lambeth said.
While takeovers of listed companies like Qube were “bittersweet”, it was pleasing to see a bidder “more fairly recognise” the logistic group’s real value, Lambeth said. “There remain plenty of attractive opportunities on the Australian Securities Exchange.”
Wilson Asset Management senior investment analyst Hailey Kim said the fund manager hadn’t ruled out the existing Macquarie bid for Qube being lifted after the asset manager finishes its exclusive period of due diligence on February 1.
“While the bid price represents a healthy premium to sector valuations, the quality and strategic nature of Qube’s assets could justify a higher price as it provides an attractive growth platform for a strategic operator,” Kim said.
“Given Qube’s sizeable franking credit balance, we also see scope for additional value to be returned to shareholders via a special dividend should a transaction proceed.”
Another big institutional investor, who requested anonymity, said that Macquarie’s offer represented fair value and there was little risk the deal would fail.
However, Qube’s potential sale – which is supported by the company’s directors – was disappointing because it reflected an ongoing trend for private owners to snap up infrastructure companies that generate long-term returns, the investor said. “It’s a fantastic group of assets.”
A series of Australian infrastructure companies have gone from the ASX over the past decade, including Patrick stevedores’ previous owner, Asciano, in 2016; energy investor Spark Infrastructure in 2021; and electricity and gas operator AusNet and Sydney Airport in 2022.
Qube owns a 50 per cent stake in Patrick ports, one of the nation’s biggest stevedores, and a rail freight terminal at Sydney’s Moorebank which has struggled to find customers since opening last year.
Qube also handles car imports – this year it bought the Melbourne International RoRo and Automotive Terminal – and counts big energy companies in Western Australia among its customers.
Port users said any change in Qube’s ownership would not change their fight to have stevedores regulated. “Macquarie clearly has its eye on the crown jewel – the 50 per cent ownership of Patrick – and why wouldn’t they?” said Paul Zalai, director of the Freight & Trade Alliance.
“Patrick, along with the other major container stevedores, effectively operates a money tap through terminal access charges, forcing transport operators to pay without any ability to influence service quality or pricing.”
The Australian Competition and Consumer Commission monitors the so-called “access” fees imposed by stevedores such as Patrick and DP World but does not have the power to regulate them. Fees charged to move containers in and out of ports have soared in recent years.
A 2022 productivity report recommended the federal Treasury develop a mandatory code for stevedores’ land-side fees and have it enforced by the ACCC, which releases its annual stevedore monitoring report in December.
If Macquarie proceeds with its proposed acquisition of Qube, it is expected to have to notify the ACCC under the watchdog’s new mandatory merger regime, an ACCC spokesman said.
Disputes have also arisen over fees stevedores charge rail operators. The NSW government has hired an independent expert to examine fees introduced in July by stevedore DP World at Port Botany.
NSW Ports, which owns Port Botany and has been investing in rail infrastructure, said it had raised questions over compliance with ministerial directions for rail pricing and performance. DP World declined to comment.
Around two-thirds of Qube’s investors are institutions, including State Street, BlackRock, Vanguard and UniSuper, which collectively own more than 20 per cent. Qube’s shares traded at $4.88 on Wednesday.
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