Aurizon Holdings Ltd. · ASX:AZJ
Aurizon — Merger or Acquisition (May 2014)
32 slides from Aurizon's merger presentation, May 5, 2014
Slide 1: ASX cover letter: Joint offer for Aquila announcement
Dominic D Smith Vice President & Company Secretary Aurizon Holdings Limited ABN 14 146 335 622 T +61 7 3019 9000 F +61 7 3019 2188 E CompanySecretary@aurizon.com.au W aurizon.com.au Level 17, 175 Eagle Street Brisbane QLD 4000 GPO Box 456 Brisbane QLD 4001 For personal use only ASX Market Announceme
Slide 2: Aurizon to participate with Baosteel in joint offer for Aquila
5 MAY 2014 AURIZON TO PARTICIPATE WITH BAOSTEEL IN JOINT OFFER FOR AQUILA. For personal use only AURIZON INVOLVEMENT TO FACILITATE INDEPENDENT RAIL & PORT INFRASTRUCTURE FOR WEST PILBARA Aurizon and Baosteel today announced an intention to make a joint bid to acquire all of the shares in ASX-liste
Slide 3: Joint Offer
Joint Offer The off-market takeover bid aims to acquire all Aquila shares at $3.40 per share. This represents a 38.8% premium to Aquila’s most recent closing price of A$2.45 per share and premiums of 32.3%, 45.0% and 52.7% over the volume weighted average price of Aquila over the past 3, 6 and 12 mo
Slide 4: Strategic fit of investment
Strategic fit of investment The proposal represents an investment in a nation building project by Australia's largest rail freight operator, Aurizon and one of China’s largest iron and steel producers, Baosteel that will create Australian jobs, boost national exports and deliver to government signif
Slide 5: Aurizon and Baosteel: joint bid for Aquila Resources Ltd
For personal use only Aurizon and Baosteel: joint bid for Aquila Resources Ltd Lance Hockridge, Managing Director and CEO Mike Carter, Executive Vice President – Strategy and Business Development 5 May 2014
Slide 6: Important notice
Important notice For personal use only No Reliance on this document This document was prepared by Aurizon Holdings Limited (ACN 146 335 622) (referred to as “Aurizon” which includes its related bodies corporate). Whilst Aurizon has endeavoured to ensure the accuracy of the information contained in t
Slide 7: Key messages
Key messages For personal use only Aurizon is participating in a joint bid with Baosteel to acquire ASX-listed Aquila by way of an off-market takeover offer transaction will result in Aurizon acquiring up to 15% of Aquila if Aurizon and Baosteel are successful in gaining 100% acceptance from Aqu
Slide 8: Bid parameters
Bid parameters For personal use only Off-market takeover offer to acquire all outstanding Aquila shares at $3.40 Aquila offer capitalisation per share. Offer represents a premium of: Offer price ($A) 3.40 38.8% to A$2.45, the closing price on Friday 2 May 2014 Shares on issue (m)3 415.5 38.0%
Slide 9: Key Agreements
Key Agreements For personal use only Aurizon has entered into agreements with Baosteel—lodged with ASX today1 Infrastructure Framework Joint Bidding Agreement Shareholders Agreement Agreement (“IFA”) Governs Governstheconduct between relationship Governs the relationship Records the framework
Slide 10: Strategic rationale
Strategic rationale For personal use only Significant opportunity for growth and diversification of Aurizon’s bulk commodities portfolio Provides opportunity to own, develop and operate rail and port supply chain infrastructure in the Pilbara, the world’s leading iron ore producing region by
Slide 11: Consistent with Aurizon's strategy
Consistent with Aurizon's strategy For personal use only 2 Value Become Maximise value in the freight and creation World Class Operate, develop and integrate bulk supply chains logistics space pillars Description Become a lean, World Class operator Expand our presence and role in new and existing bu
Slide 12: Overview of Baosteel
Overview of Baosteel For personal use only Baosteel Group is a state-owned steel company headquartered in Shanghai, China One of China’s largest steel producers with crude steel output of approximately 43.8 million tonnes in 2012 19.8% shareholder in Aquila; first invested in Aquila in 2009
Slide 13: Overview of Aquila
Overview of Aquila For personal use only ASX-listed resources business which owns a number of iron ore and coal projects at pre-development stage1 Key assets include: 50% interest in Australian Premium Iron (API) Joint Venture with interests in the West Pilbara 50% interest in Eagle Downs me
Slide 14: Overview of the WPIOP — mine projects
Overview of the WPIOP — mine projects For personal use only One of Australia's most substantial greenfield iron ore projects WPIOP – mine projects Project Parties Participating Interests Managed by API Management Pty Ltd—owned 50% by Aquila API 60% earning up to 80% and 50% by AMCI(IO)1 Red Hill
Slide 15: Overview of the WPIOP — infrastructure project
Overview of the WPIOP — infrastructure project For personal use only Greenfield heavy haul rail line linking mines to new Anketell Port – Stage 1: ~280km – Stage 2: ~150km Port expandable up to approximately 350mtpa APIJV has estimated rail and port costs for development of Stage 1 (30mtpa) an
Slide 16: Pathway to a multi-user, integrated supply chain infrastructure development
Pathway to a multi-user, integrated supply chain infrastructure development For personal use only Infrastructure Infrastructure Multi-user, Takeover offer exclusivity development integrated for Aquila stage stage supply chain The offer provides a step toward Aurizon being given an opportunity to p
Slide 17: Step 1 — takeover offer for Aquila
Step 1 — takeover offer for Aquila For personal use only Infrastructure Infrastructure Multi-user, Takeover offer exclusivity development integrated for Aquila stage stage supply chain Off-market takeover offer for Aquila announced today Three possible outcomes: A. offer lapses: Aurizon does not
Slide 18: Step 2 — infrastructure exclusivity stage
Step 2 — infrastructure exclusivity stage For personal use only Infrastructure Infrastructure Multi-user, Takeover offer exclusivity development integrated for Aquila stage stage supply chain Aurizon and Baosteel to carry out activities in connection with infrastructure development and infrastruct
Slide 19: Step 3 — infrastructure development stage
Step 3 — infrastructure development stage For personal use only Infrastructure Infrastructure Multi-user, Takeover offer exclusivity development integrated for Aquila stage stage supply chain Infrastructure Development Agreement between InfraCo and MineCo will provide for: – InfraCo (to be majorit
Slide 20: Step 4 — multi-user, integrated supply chain
Step 4 — multi-user, integrated supply chain For personal use only Infrastructure Infrastructure Multi-user, Takeover offer exclusivity development integrated for Aquila stage stage supply chain Following development of the base case infrastructure, there will be a range of opportunities to expand
Slide 21: Funding
Funding For personal use only 1 Takeover Offer Aurizon equity contribution for Aquila acquisition ($211 million1 based on an offer price of $3.40 and 100% acquisition) to be funded from cash reserves and existing debt arrangements, within credit rating limits 2 Infrastructure InfraCo would be fu
Slide 22: Summary
Summary For personal use only Aurizon is participating in a joint bid with Baosteel to acquire ASX-listed Aquila by way of an off-market takeover offer transaction will result in Aurizon acquiring up to 15% of Aquila if Aurizon and Baosteel are successful in gaining 100% acceptance from Aquila s
Slide 23: Questions & Answers
For personal use only Questions & Answers 19
Slide 24: Aurizon and Baosteel: joint bid for Aquila Resources Ltd – Support Pack
For personal use only Aurizon and Baosteel: joint bid for Aquila Resources Ltd Support Pack
Slide 25: Key Conditions of the Offer
For personal use only Key Conditions of the Offer 21
Slide 26: Key Conditions of the Offer
Key Conditions of the Offer For personal use only The Offer will be subject to the following conditions, unless waived by the Bidders: a) 50% Minimum Acceptance (fully diluted basis) b) Baosteel FIRB approval c) Aurizon FIRB approval d) Conduct of business in the ordinary course and no material acqu
Slide 27: Further information on Aquila
For personal use only Further information on Aquila 23
Slide 28: West Pilbara Iron Ore Project
West Pilbara Iron Ore Project For personal use only WPIOP is a greenfield iron ore project located in the Stage 1 mining areas Pilbara region of Western Australia Aquila has a 50% interest in API Management Pty Ltd, the manager of the WPIOP and holder of majority participating interests in the mine
Slide 29: Queensland Coal projects
Queensland Coal projects For personal use only • Aquila has a 50% interest in Eagle Downs, a greenfield underground hard coking coal project located 25km south of Moranbah in Queensland’s Bowen Basin Eagle Downs 254.1Mt 959.0Mt • The project is currently in development, with first production forecas
Slide 30: South African projects
South African projects For personal use only • Aquila has a 74% interest in the Thabazimbi Iron Ore Project, a greenfield iron Thabazimbi ore project located in the Limpopo Province of South Africa, approximately Iron Ore -- 80.8Mt 200km north west of Pretoria Reserve Resource • A concept study has
Slide 31: WPIOP ownership structure
WPIOP ownership structure For personal use only Other Aquila AMCI POSCO Baosteel shareholders 51% 49% 19.8% 80.2% APIJV AMCI (IO) Aquila 50% 50% Cullen Resources, Red API Management Pty Other Aquila assets Hill Iron, Helix, DeBeers Ltd Minority / Royalty Majority 100% Stage 1 Projects: Stage 2 Proje
Slide 32: Aurizon and Baosteel: joint bid for Aquila Resources Ltd
For personal use only Aurizon and Baosteel: joint bid for Aquila Resources Ltd Lance Hockridge, Managing Director and CEO Mike Carter, Executive Vice President – Strategy and Business Development 5 May 2014