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Australia's Asciano faces a new legal hurdle in $6.7 bln buyout

Published 17/05/2016, 04:50 pm
© Reuters.  Australia's Asciano faces a new legal hurdle in $6.7 bln buyout
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SYDNEY, May 17 (Reuters) - A trucking company half-owned by Australia's Asciano Ltd AIO.AX took the port and rail giant to court, demanding assurance about its future under an A$9.1 billion ($6.7 billion) buyout of the parent company, a hiccup in the long-running deal.

In a preliminary hearing on Tuesday, Australian Container Freight Services Pty Ltd (ACFS) asked the Supreme Court of New South Wales to make Asciano confirm its rights under Asciano's plan to be bought by a host of global investors including Canada's Brookfield Asset Management Inc BAMa.TO and China Investment Corp CIC.UL .

The specifics of ACFS's concerns were not immediately clear and a spokeswoman declined comment. Asciano said in a statement that it will defend the action but a spokesman declined to comment further.

The court set a tentative hearing date for May 31, the Asciano spokesman said.

Although Asciano says its half stake in ACFS is worth A$36.2 million, just 0.4 percent of the value of its overall value under the takeover plan, a legal dispute with a subsidiary could create an obstacle for a deal that has already been beset by delays.

The Australian Competition and Consumer Commission has already pushed back the companies' agreed deal timelines by raising antitrust concerns. It is scheduled to give a final ruling on the deal on May 26, but a legal snarl may cause uncertainty for Asciano shareholders when they vote on the proposal on June 1.

Asciano has previously said it does not expect the matter to delay the deal.

Takeover documents sent to Asciano shareholders this month said that under the breakup proposal Asciano's ACFS stake would go to Brookfield but "it is possible that the other shareholders in ACFS Port Logistics may have pre-emptive rights to acquire the interest in ACFS Port Logistics".

($1 = 1.3587 Australian dollars)

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