The opportunity for Aurizon would be that a merger with Qube would reduce the proportion of earnings it generates from coal, making the business more appealing to environmentally friendly investors. There is also the matter of the Australian Competition and Consumer Commission, although a transaction is not an impossibility from a competition watchdog perspective.Qube has worked with UBS in the past so the thinking is that if any transaction was to transpire, it would involve the Swiss bank and potentially Barrenjoey Capital, launched with former UBS staff.
Aurizon’s result delivered last Monday showed earnings and sales growth have been flat over the past year, as it delivered $607m annual net profit .Of its overall earnings before interest, tax, depreciation and amortisation, it generated $533m from coal haulage, $140m from its bulk port operation, which it hopes to grow, and $849m from its network business.It has hopes of generating between $1.4bn and $1.5bn of EBITDA this financial year.
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