Asciano : Notice issued to Brookfield-revised Qube Consortium Proposal

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Date: 8 February 2016

ASCIANO ISSUES NOTICE TO BROOKFIELD INFRASTRUCTURE IN RELATION TO REVISED PROPOSAL FROM THE QUBE CONSORTIUM

Key highlights

• Asciano has received a revised proposal from Qube Holdings Limited, Global Infrastructure Partners, Canada Pension Plan Investment Board and CIC Capital Corporation to acquire up to 100% of the issued capital of Asciano.
• Asciano Board has issued a notice to Brookfield Infrastructure Partners Limited triggering its matching rights under the Brookfield Bid Implementation Deed.
• Offer consideration under the revised proposal consists of A$7.04 cash and 1 Qube share per Asciano share with an implied value of A$9.24 per Asciano share based on A$2.20, the closing price of Qube shares on 5 February 2016.
• Asciano is permitted as part of the transaction to pay fully franked dividends of up to A$0.97 per Asciano share, comprising an interim and a special dividend. This will potentially provide an additional benefit of up to A$0.416 per Asciano share for shareholders who can capture the full benefit of the franking credits1. The cash component of the consideration will reduce by the cash amount of any dividends paid.
• Implied offer value (including the amount of the permitted dividends) represents a 38.9% premium to the undisturbed Asciano share price on 30 June 2015 (the day prior to the announcement of receipt of the initial Brookfield proposal), and an EV/EBITDA multiple of 10.6x for the year ended 30 June 20152.

1

Whether a shareholder is able to capture the full benefit of the franking credits will depend on their personal tax

circumstances, including whether they satisfy relevant holding period rules. The quantum of the dividends paid will be determined by the Asciano Board, but will not exceed a level that may be fully franked based on available franking credits, which may be less than A$0.97 per Asciano share.

2

Based on offer consideration of A$9.24 per share based on the Qube closing price of A$2.20 on 5 February 2016 and Asciano

net debt of A$3.1bn as at 30 June 2015.

Investor and Analyst Enquiries:

Kelly Hibbins

Phone: + 61 2 8484 8046

Email: Kelly_hibbins@asciano.com.au

Media Enquiries:

Richard Baker

Phone: + 61 408 985 008

Email: media@asciano.com.au

Transaction Overview

Asciano Limited (ASX:AIO, OTCUS:AIOYY) (Asciano) today announces that it has received a revised proposal (Qube Consortium Proposal) from Qube Holdings Limited (Qube), Global Infrastructure Partners (GIP), Canada Pension Plan Investment Board (CPPIB) and CIC Capital Corporation (CIC Capital) (together, the Qube Consortium).

Following detailed consideration, the Asciano Board has determined that the Qube Consortium Proposal is a superior proposal for the purposes of the Brookfield Bid Implementation Deed as amended on 9 November 2015 (Brookfield BID) and has issued a notice to Brookfield Infrastructure Partners Limited (Brookfield Infrastructure) required by the matching right regime under the Brookfield BID. Brookfield Infrastructure now has the right, but not the obligation, to submit within 5 business days a matching or superior proposal for the Asciano Board. The matching right period will conclude at the end of Monday, 15 February 2016.

Asciano has also been informed by Brookfield Infrastructure of details concerning a revised transaction on which they are working. A copy of the letter to Asciano is attached. In making its decision in relation to the Qube Consortium proposal, the Board noted that at this stage there was no certainty that a new Brookfield Infrastructure proposal would be made or the timing of such a proposal.

Summary of Qube Consortium Proposal

Acquisition of Asciano shares

The Qube Consortium Proposal involves GIP, CPPIB and CIC Capital, through a jointly owned bid vehicle (BidCo) making an off-market takeover bid to acquire all of the shares in Asciano for consideration of A$7.04 cash and 1 Qube share per Asciano share. In part recognition of the expected cash generation by Asciano in the period prior to close of any takeover offer, the Qube Consortium has agreed to an A$0.07 increase over and above the consideration proposed in its letter on 28 January 2016.

The Qube Consortium Proposal for Asciano represents an enterprise value of approximately A$12.1 billion and an equity value of approximately A$9.0 billion3.

The Qube Consortium Proposal has an implied value of A$9.24 per Asciano share based on Qube's closing price of A$2.20 on 5 February 2016, and A$9.21 per Asciano share based on Qube's volume weighted average price (VWAP) for the 30 trading days to 5 February 2016 of A$2.17. If the Qube Consortium Proposal proceeds and ATO approval is obtained in respect of the special dividend, Asciano is permitted to pay fully-franked dividends of up to A$0.97 per share (Permitted Dividends), in aggregate, comprising an interim and special dividend, to enable franking benefits of up to A$0.416

per share to be distributed to eligible Asciano shareholders4. The interim dividend is not subject to an

ATO ruling. To the extent that Permitted Dividends are paid, the cash component of the consideration will be reduced by the amount of the Permitted Dividends. The quantum of any dividends paid will be determined by the Asciano Board, but will not exceed a level that may be fully franked based on available franking credits, which may be less than A$0.97 per Asciano share.

3

Based on offer consideration of A$9.24 per share based on the Qube closing price of A$2.20 on 5 February 2016 and Asciano

net debt of A$3.1bn as at 30 June 2015.

4

Whether a shareholder is able to capture the full benefit of the franking credits will depend on their personal tax

circumstances, including whether they satisfy relevant holding period rules.

The implied value of the Qube Consortium Proposal of A$9.24 per share5 represents a premium of 38.9% to the closing price of Asciano's shares of A$6.65 on 30 June 2015, the last trading date prior to the date on which Asciano announced that it had received an indicative, non-binding and conditional proposal from Brookfield Infrastructure.

Sale of Terminals and BAPS

Under the terms of the Qube Consortium Proposal, GIP, CPPIB and CIC Capital will acquire control of the rail business of Asciano by acquiring, through a jointly-owned bid vehicle (BidCo), shares in Asciano.

Qube will acquire 100% of Asciano's Patrick container terminal business and a 50% interest in Australian Amalgamated Terminals (AAT) (together, Ports) for an enterprise value of A$2,650 million.

The remaining Bulk & Automotive Port Services businesses and 50% interest in ACFS Port Logistics Pty Ltd (collectively BAPS) will be sold to an entity to be established and owned by GIP, CPPIB and CIC Capital initially (BAPS HoldCo) for an enterprise value of A$850 million. BAPS HoldCo will seek to sell the BAPS businesses to a third party or parties. Qube may also seek to acquire certain of the BAPS assets, subject to regulatory approvals.

The proceeds from the sales of BAPS to BAPS HoldCo and Ports to Qube (net of any funding obtained by Asciano to fund the Permitted Dividends) will be returned to Asciano shareholders who do not accept the offer by way of a pro rata capital return6 after the takeover completes.

The takeover offer will be subject to a condition that Asciano shareholders, by simple majority vote in general meeting, approve the sale of the Ports business to Qube, the BAPS business to BAPS HoldCo, and the pro-rata capital return. The Ports Share Purchase Agreement and the BAPS Share Purchase Agreement are also subject to ACCC approval.

Completion of the Ports Share Purchase Agreement and the BAPS Share Purchase Agreement would occur only after the close of the takeover offer, and will remain subject to the takeover offer becoming unconditional.

Funding

The Qube Consortium has advised that the majority of the cash consideration payable by BidCo under the takeover offer will be provided to BidCo by GIP, CPPIB and CIC Capital with the remainder provided by Qube to BidCo via funding arrangements within the Consortium. In addition, Qube will pay a portion of the cash component of the bid consideration directly to accepting shareholders. The scrip component of the consideration will be satisfied by the issue of Qube shares to accepting Asciano shareholders. Depending on the level of acceptances under the takeover offer, Qube also intends to raise additional equity.

If the Qube Consortium proposal proceeds, information regarding the Consortium's funding arrangements, including the Qube capital raising, will be contained in a bidder's statement sent to shareholders.

5

Based on Qube's closing price of A$2.20 on 5 February 2016

6

An ATO ruling will be sought in relation to the proposed capital return, which will determine its composition including the

dividend component, if any.

Brookfield Infrastructure and matching rights notification

As required by the matching rights notification obligations under the Brookfield BID, Asciano has now provided Brookfield Infrastructure with the material terms and conditions of the Qube Consortium Proposal. Should Brookfield Infrastructure elect to exercise its right to submit a matching or superior proposal, the Asciano Board will give that proposal full consideration.

Asciano has agreed the form of an implementation deed in relation to the takeover offer by the Qube Consortium (Qube Consortium Implementation Deed) and sale agreements in relation to Ports and BAPS (together the Qube Consortium Agreements). If Brookfield Infrastructure does not submit a matching or superior proposal within the required time frame, the Asciano Board will be able to change its recommendation and execute the Qube Consortium Agreements. Under the terms of the Brookfield BID, none of the Asciano directors may change their recommendation until the completion of the matching rights process.

Any recommendation by the Asciano Board of the Qube Consortium Proposal will be subject to requirements that an independent expert has opined that the takeover offer and sale of Ports and BAPS are each fair and reasonable to Asciano shareholders and that Asciano has not received a superior proposal at that time. If there is a change in recommendation in favour of the Qube Consortium Proposal, a break fee of A$88 million will be payable to Brookfield Infrastructure.

Key terms

The Qube Consortium Proposal would be effected by way of off-market takeover offer and is subject to a number of key terms, including (among others):

• Conditions precedent including:

  • Minimum acceptance condition of 50.1% of Asciano shareholders;7

  • Regulatory approvals (FIRB, ACCC, NZ OIO, European Commission, and any required ASIC and ASX approvals);

  • no Asciano prescribed occurrences or material adverse change occurring;

  • other conditions as set out in full in Annexure A;

• Approval by ordinary resolution of Asciano shareholders of the sale of Ports and BAPS and the payment of associated net proceeds to Asciano shareholders by way of a pro rata capital return after the takeover completes;

• Exclusivity provisions (including no shop and no talk, fiduciary exception, notification of approaches, matching right); and

• Break fee equal to A$88 million payable upon a change of control of Asciano or a material breach of the terms of the Qube Consortium Implementation Deed.

Note that the Qube Consortium Proposal remains conditional and dependent upon Brookfield not exercising its matching right, and the signing of the Qube Consortium implementation deed and sale agreements. For this reason, the Qube Consortium has made it clear that its proposal described in this announcement should not at this stage be regarded as a proposal to make a takeover bid for the purposes of section 631 of the Corporations Act.

7

Includes the current 19.99% interest in Asciano held by Qube.