bxb takeover

Toll team ready for Brambles takeover
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Adele Ferguson | August 24, 2007

THE team that tried to steal Patrick Corp from under the nose of Toll Holdings two years ago is now working for Toll spinoff Asciano, in what is a clear prelude to a bid for Brambles.

Macquarie investment banker Wayne Kent, who worked with the Singapore Government's Temasek and others on an ultimately unsuccessful bid for Patrick Corp in mid 2005, is now working with Asciano, which yesterday was revealed to have a holding of more than 4 per cent in Brambles.

Asciano, the ports and railways business spun out of Toll last year, is believed to have had several approaches in relation to helping it fund a takeover, including Mr Kent's. He has now been appointed to act for Asciano, which is run by former Toll executive Mark Rowsthorn.

Mr Rowsthorn is extremely familiar with Brambles, having been at Toll when it was buying Brambles shares over a year ago, although the law forbids any acting in concert between Asciano, which has 4 per cent of Brambles, and Toll, which owns 0.5 per cent.

But Toll chief executive Paul Little has been more vocal than anyone at Asciano about his desire to own some, or all, of Brambles' global Chep pallet business.

The talk is that one of the proposals has a similar financial structure to the one that bid for Patrick. Asciano has a market capitalisation of $6 billion. A bid for Brambles would require about $22 billion.

The upshot is that any bid by Asciano would require financial backers and involve its making a reverse takeover of Brambles. Mr Rowsthorn would run the merged entity, which would include Chep, pallets, port and rail. The Recall document business would be sold in a trade sale.

It is understood that Macquarie Bank has received several other approaches in the last two weeks to fund a potential deal.

Asciano is believed to be assessing various proposals and is undecided on whether to make a bid, or just build a blocking stake against another potential bidder, such as Toll Holdings, which has stated it is interested in making a bid.

Mr Little on Wednesday showed how keen he was to own Brambles: "This is not a new initiative. A Brambles acquisition was clearly there on the drawing board before we had restructured the company," he told the media as he reported Toll's first profit result since it spun off Asciano into a separate listed structure to hold its port and rail operations.

Asciano has been buying shares in Brambles over the past six weeks through a variety of nominee companies. Brambles put out its sixth update to shareholders yesterday, revealing that a share registry sweep had identified Asciano now held 4.09 per cent of the company.

Macquarie Securities, acting on behalf of Asciano, is believed to have been in the market again yesterday, but until Asciano reaches the 5 per cent threshold, it does not have to put out a disclosure notice. Once it does that, it has to disclose extra information such as links to other entities that might own shares in Brambles. This could take it to almost 10 per cent.

Brambles chief executive Mike Ihlein shocked the market two weeks ago when he revealed that Toll and Asciano had been secretly building a stake in the company. At the time, Asciano had built up 1.8 per cent.

Asciano and Toll both denied they are working in concert, as such a link would run into problems with the Australian Competition and Consumer Commission.