THE AUSTRALIAN Competition and Consumer Commission has announced it will not oppose the Macquarie Asset Management-led (MAM) consortium proposal to acquire all shares in grain trader and logistics company Qube.

The news comes days after more than 98 percent of Qube shareholders voted in favour of the deal.

The acquisition still awaits required regulatory approvals from the Australian Foreign Investment Review Board and the NZ Overseas Investment Office.

Qube and MAM expect the scheme to become effective on July 8, with implementation scheduled for August 14, subject to the deal proceeding as planned.

In November last year, Qube announced MAM had made a proposal to acquire it, with the bid then valued at about $11.6 billion.

The proposal, which has since been made public, involves a consortium of funds managed by MAM and co-investors, collectively known as the Rubik Consortium.

The Rubik Consortium comprises: UniSuper, with a 20-percent stake; Pontegadea Shareholdings Luxembourg Sàrl, an entity indirectly owned by Pontegadea, holding 15pc through a dedicated special-purpose vehicle; and MAM Rubik Consortium, as trustee for the MAM Rubik Consortium Trust (MAM Box), holding 65pc.

Other investors will own an interest in Qube through the MAM Box and include Temasek, GIC Private Limited, CalPERS and the National Pension Service of South Korea.

If the scheme proceeds, each Qube shareholder will receive total payments of $5.20 per share, made up of a scheme consideration, interim dividend, and special dividend.

ACCC determination

After assessing the deal, the ACCC concluded on Wednesday it was unlikely to result in a substantial lessening of competition, paving the way for the takeover to proceed.

The competition watchdog examined several potential issues with the transaction, including the vertical relationship between Qube and the Port of Newcastle (PON), in which MAM has an investment management role, and overlaps arising from the interests of minority co-investors.

MAM’s role in PON involves providing investment management services to a trustee of The Infrastructure Fund (TIF) which holds a 50pc interest in PON.

Qube is a tenant and user of PON where it provides services including bulk and general stevedoring and haulage, and is the owner and operator of the Newcastle Agri Terminal.

The parties submitted that the PON’s management team operates independently of TIF and MAM and does not include employees or appointees from either company.

The ACCC accepted the submission and the independence of the PON team

The ACCC also examined whether the acquisition would give MAM the ability or incentive to foreclose on Qube’s competitors, in this case GrainCorp.

Qube chair John Bevan.

The watchdog found that given GrainCorp’s dominance in New South Wales through its owned up-country storage network, and GrainCorp’s ownership of its Carrington terminal, this was unlikely.

The ACCC also found no material competition concerns arising from overlaps in minority shareholder interests, including cases where those interests sit in entities that compete with Qube in stevedoring or rail services, or supply inputs to its related businesses.

One example includes UniSuper which also owns small interests in Aurizon, GrainCorp, and Hutchison Port Holdings, and an 11pc passive interest in TIF.

Shareholder support

The ACCC’s backing leaves few obstacles to the transaction proceeding as planned.

Qube’s scheme meeting on Tuesday confirmed broad support for the transaction, with shareholders, the board and the independent expert backing the bid.

Qube chairman John Bevan said the meeting was “a significant day in the history of Qube”.

“Qube has grown successfully since its foundation in 2006 to become a leading logistics solutions provider today with operations across Australia, New Zealand and the Asia-Pacific region,” Mr Bevan said.

“We have grown during this time from approximately 150 employees and 30 sites to over 10,000 employees in more than 200 locations.

Considered Australia’s largest logistics provider, Qube has operations across the country and New Zealand ranging from freight and stevedoring facilities to road and rail services,  and a 50-percent stake in Patrick Terminals.

Its grain arm includes up-country and port assets in New South Wales, namely the Newcastle Agri Terminal and Port Kembla’s Quattro facility, as well as sites at Narromine, Coonamble, Narrabri, and Harefield.

Qube has its own rail fleet and Qube Logistics (Rail) Services, which currently operates an average of 150 rail services per week in metropolitan and regional areas.

Source: Qube, ACCC