BREAKINGVIEWS-Storage buyouts save Aussie M&A blushes

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Updates to add graphic.

By Antony Currie

MELBOURNE, Dec 9 (Reuters Breakingviews) - Dealmakers Down Under can head into the Christmas holiday season feeling a bit less downbeat. On Monday, Brookfield Asset Management BAM.N and Singapore sovereign wealth fund GIC agreed to take Sydney-listed National Storage REIT NSR.AX private at an enterprise value of A$6.7 billion ($4.4 billion). Meanwhile, Macquarie Asset Management is in exclusive talks to potentially buy container and logistics firm Qube QUB.AX for $7.7 billion. Assuming both acquisitions go through, they will spare some M&A blushes.

A few high-profile transactions involving Australian companies and assets fell through this year, most recently BHP's BHP.AX second – and very swiftly ended – tilt at Anglo American AAL.L last month. The proposal, which was put together with help from Lazard LAZ.N and UBS UBSG.S, valued the target at some $53 billion, per Bloomberg. And in September, the United Arab Emirates' ADNOC ditched its $19 billion pursuit of oil and gas driller Santos STO.AX, leaving JPMorgan JPM.N, Goldman Sachs GS.N and Rothschild empty-handed. That came just a few weeks after Peabody Energy BTU.N buried its agreed purchase for up to $3.8 billion of Anglo's Queensland coal mines.

It meant that until Monday, $2.5 billion was the value of the largest M&A deal Down Under this year where both sides had signed on the dotted line. The honours were split between CC Capital's buyout of Insignia Financial IFL.AX and money manager Washington H. Soul Pattinson SOL.AX scooping up the 53% it didn't own of Brickworks in a merger-cum-buyout valuing the combined entity at $9 billion.

That was adding up to a pretty lean 12 months for the country's M&A bankers, especially in private equity: there would have been just $21 billion-worth of announced and active buyouts, the second-worst showing of the past five years, per Dealogic data, without the NSR and potential Qube transactions, which include Macquarie MQG.AX, UBS, Jefferies, Deutsche Bank DBKGn.DE, Citi and JPMorgan as advisers.

It's not just the bankers who were facing a lack of kudos and lower bonuses. Over the past couple of years, private equity firms from Blackstone BX.N to CVC have been bulking up in or flocking to Australia on the hunt for targets. NSR and Qube may give them all hope that there are busier times ahead.

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CONTEXT NEWS

Brookfield and GIC on December 8 agreed to buy National Storage REIT for an enterprise value of A$6.7 billion ($4.4 billion). At A$2.86 a share, the duo and affiliates are offering a 26.5% premium to NSR's undisturbed price on November 25, the last trading day before news broke that the consortium had made an unsolicited, non-binding, indicative and conditional offer.

On November 24, Qube said it had received a conditional, non-binding and indicative takeover proposal from Macquarie Asset Management that valued the container and logistics firm at A$11.6 billion ($7.7 billion), an almost 28% premium to the undisturbed price. The two sides have not formalised a deal but are in exclusive discussions.

(Editing by Una Galani; Production by Ujjaini Dutta)

((For previous columns by the author, Reuters customers can click on CURRIE/antony.currie@thomsonreuters.com))