OTTAWA: Two of Canada’s biggest investors are battling for control of Australian port and rail assets in a duel that threatens to scupper the biggest foreign takeover proposal in Australia this year.
A group including Canada Pension Plan Investment Board bought a 19.99 percent stake in Melbourne-based Asciano Ltd. in an attempt to thwart an A$8.9 billion ($6.3 billion) bid by Brookfield Asset Management Inc., Canada’s largest alternative asset manager.
The contest reflects demand for Australian assets, from ports to electricity grids and desalination plants, as Canadian firms are drawn by the nation’s relative stability, cultural similarity and almost quarter-century of economic growth, said Evan Lucas, a market strategist at IG Ltd. Foreign acquisitions of Australian companies announced this year have jumped to A$69.9 billion compared to A$39.4 billion for all of 2014, according to data compiled by Bloomberg.
“Canadian investors have always seen value and stable returns here, particularly in infrastructure, logistics and agriculture assets,” Lucas said by phone from Melbourne. “It also gives them exposure to Asia, without some of the risks of having to be in Asia.”
