TPG still wants to buy Asciano

bevans · Posted: Mon Oct 27, 2008 2:14 pm

Asciano has indicated there could be another takeover attempt from private equity consortium TPG, two months after dismissing the consortium’s $2.9 billion bid.

The Texas-based consortium of TPG Capital and Global Infrastructure Partners (GIP) approached Asciano this August with a “non-binding” offer at $4.40 per security, but the debt-laden company rebuffed the proposal, saying the bid underestimated its true value.

Currently Asciano shares are staggering at around $2.75, after experiencing a near-60 per cent fall so far this year.

At the company’s first annual meeting held yesterday, chairman Tim Poole said he received another brief telephone call from the consortium this Monday.

“They indicated they may seek to have further discussions with Asciano in the future, but nothing has been agreed,” Mr Poole said.

“The board absolutely believes that the current market price of Asciano securities in no way reflects the underlying value of Asciano’s businesses, in the same way that the indicative offer from TPG and GIP failed to recognise that true value.”

Disgruntled shareholders took aim at the “generous” paycheques made to the company’s chief executive Mark Rowsthorn and senior executives, despite the company’s depressing performance in the last financial year.

While defending the pay arrangements in the year as “appropriate”, Mr Poole conceded they failed to reflect the losses on Brambles and would adjust Mr Rowsthorn’s short-term incentive.

“In hindsight both Mr Rowsthorn and the board believe these exceptional circumstances should be taken into account.

“The impact of this [adjustment] will be that Mr Rowsthorn’s 2009 short-term incentive will be approximately $750,000 less than would otherwise be the case,” Mr Poole said.

Mr Rowsthorn said Ascinao’s first year since gaining independence from Toll Holdings saw “a very satisfactory operating performance” but the unprecedented volatility and weakness in global financial markets could have adverse impacts on its operations.

“At this stage, our expectations for the 2009 full-year remain on track.

“The fact that the overall business is continuing to track in line with our expectations despite an uncertain economic environment is a testament to the quality, diversity and strategic market positioning of our business,” he said.

Mr Poole said the company recently underwent an extensive and detailed ten-year strategic planning process, and the outlook was “attractive”.

“The board and management team are working to close the gap between the security prices and the underlying value of our business as soon as possible.

“If we combine the organic growth we expect with the new growth opportunities we have secured and move to a more acceptable capital structure, there is no doubt in my mind that Asicano will be able to turn around its poor trading performance to date and prove to be a valuable investment,” he said.

--Transport and Logistics News

RP2 - Project Director

"Victoria, the home of world class project blowouts and overruns" Mr. Bachelor, hang your head in Shame!

DalyWaters · Posted: Wed Oct 29, 2008 7:25 pm

Maybe this story was planted by Asciano to try to bunk up their share price.

It didn't work. They dropped to $2.15 today.

DalyWaters · Posted: Wed Nov 05, 2008 11:33 pm

Yesterday's newspapers had Asciano spruiking to the pension and super funds, desperately trying to sell off half of Pacific National in an effort to stay afloat.

If the local funds don't buy in, they are off to Asia looking for a partner there.