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TPG makes a $1 billion move on Asciano

Private equity consortium TPG has reportedly made a $1 billion share offer to Asciano, after its initial takeover proposal was thwarted three months ago.

According to The Australian Financial Review, TPG founder David Bonderman has recently flown from the US to Melbourne to put another proposal to buy more than $1 billion in Asciano shares.

The Texas-based consortium of TPG Capital and Global Infrastructure Partners (GIP) initially approached Asciano this August with a $2.9 billion “non-binding” offer, but the company rebuffed the proposal, saying the bid underestimated its true value.

At the company’s annual general meeting held two weeks ago, Asciano chairman Tim Poole had 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.”

Asciano’s shares are now languishing at around $2.15, less than half of the takeover offer of $4.40 per security.

The paper said the cash-strapped company was likely to reject the new offer again as it intended to push through with its plans to raise $ 1 billion by asset sales or monetising.

It attempted to ease its debt burden through the underwritten security purchase plan in September, but secured only 10 per cent of the initial target.

Asciano, which owns some of Australia’s major transport assets including Pacific National, is reported to have a market value of $1.5 billion, while its debt amounts to almost $4.5 billion.

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