Asciano has dismissed a $2.9 billion takeover offer from a Texas-based consortium, saying it undervalues its business.
The rejection came shortly after the Australian rail and ports operator has announced that it has received “an unsolicited non-binding indicative proposal” from Texas Pacific Group (TPG) and Global Infrastructure Partners to acquire 100 per cent of the issued securities of the company through a scheme of arrangement.
“The proposal includes a cash alternative of $4.40 per Asciano security. There is a scrip alternative of unlisted securities in a bidding company,” the company said in an Australian stock exchange (ASX) statement.
Fuelled by speculations about the bid, the company’s shares sharply rose 68 cents to $4.83, surpassing the TPG-led consortium’s offer.
Responding to queries from the ASX on a dramatic increase in its share price, the company said: "Asciano remains aware of ongoing media speculation regarding the potential for Asciano to raise additional equity and/or to sell assets.
"Asciano continues to assess a range of options and consider a range of factors in determining the optimum financing strategy for future growth."
Analysts said the price proposed in the bid was too low, and the current price of the company’s stock does not reflect its potential value.
Angus Gluskie, a portfolio manager at White Funds Management, said the TPG offer was “a very low ball bid.”
“On most analysts’ numbers you can also see the underlying assets are worth significantly more than the current share price. On our numbers, there is still several dollars in it,” he told The Sydney Morning Herald.
“As often happens when people lose sight of the fundamental value of the asset, an opportunity arises. It’s a minor surprise but it makes a lot of sense.”
The report on the company’s full year results is expected to be released on August 6.