Brierley's raiders strike before he sits down

At age 74, Sir Ron is set to gain control of India Equities and chair the fund after reaching a $8.3 million purchase agreement last month. And already, the fund established to invest in shares listed in India before it stopped doing so in July last year has launched an assault with the hallmark brashness and opportunism often seen in Brierley's heyday.

Late on Friday, India Equities (INE) launched an unconditional 4.8?-a-unit

on-market offer, worth about $3.9 million, for all the units it did not already own in the Asset Backed Yield Trust (AYT) of Adelaide Managed Funds, a subsidiary of Bendigo and Adelaide Bank.

Units in the trust had last traded at 4.4?, and INE's offer ticks all the boxes when it comes to healthy premiums over historical average prices.

The twist, however, is that AYT will be delisted on Thursday, as has been the plan since September last year. AYT has liquidated its holdings and returned capital to its unit holders, to the point that the only assets it now holds are loans made to individuals who invested in the ill-fated Great Southern managed investment schemes.

Those hapless investors were finally granted the right to launch a class action against the Bendigo and Adelaide Bank last month, but more on that later.

Needless to say, the carrying value of the loans (that is, what AYT expects to be repaid) has been marked down significantly about three-quarters to about $3.8 million.

Clearly those in Brierley's camp see some value in the loans that the accountants cannot.

With only two days to go, AYT has refused a request to postpone its delisting, arguing that the offer fell short of the units' net tangible asset backing of 5.5? a unit. It said the fact that unit holders had only four trading days to consider the offer was "inconsistent with the principles of the Corporations Act".

INE validly argues that the offer provides unit holders with the certainty of cash in hand rather than the uncertainty of future distributions, and that AYT has historically always traded well below its NTA values.

If AYT doesn't budge, INE looks unlikely to be able to gain control by Thursday, but it will be able to keep the shares it has vacuumed up in the meantime.

Qube's chain reaction

FREIGHT and logistics company Qube, chaired by former Patrick chief Chris Corrigan, has made little secret of its desire to expand its transport services to all points of the supply chain from "pit to port".

Having broken into in the S&P/ASX 200 for the first time in September, Qube yesterday announced the completion of an $85 million capital raising through a share placement, $50 million of which will be taken up by cornerstone shareholder Carlyle Infrastructure Partners. Carlyle's stake in Qube will increase from about 10 per cent to just shy of 15 per cent.

In its announcement to the market, Qube said it was "negotiating several acquisitions and investments".

One clear option will be to increase its ownership in the Moorebank development site, in New South Wales, on which a large intermodal freight terminal, in close proximity to the M5 and linked by rail to Port Botany, will be built. Qube chief executive Maurice James himself a former Patrick senior executive has previously admitted interest in property group Stockland's 55 per cent share, which has been valued by some at about $200 million.

It is all part of a plan to benefit from state governments investing in rail transport services to ports.

NSW in particular, has had a big problem with freight congestion at its ports and roads, while use of rail for freight has declined steadily in the past five years, in part due to inadequate infrastructure. The $1 billion Moorebank terminal is designed to alleviate the problem. Qube Logistics has also invested in developing infrastructure for handling bulk materials in Western Australia.

But Qube is just likely to absorb smaller operators to bolster existing gaps in its supply chain offering, for example in trucking to retailers.

"Anything they can add to their existing businesses and create synergies will be of interest," Simon Dumaresq, an analyst at EL & C Baillieu said. "There are a lot of smaller operators doing just one fragment of a chain."

Qube yesterday also said it would pay $21.4 million in scrip for the 5.3 per cent of P&O Trans Australia it doesn't already own.

Make that light or heavy?

THE dramatic softening in rare-earth prices of late has, for now at least, burnt many investors speculating on rare earth hopefuls including Lynas and California-based Molycorp.

Rare-earth elements are geopolitically strategic because of the instrumental role they play in a range of technologies, including hybrid car batteries, mobile phones, iPads and even bombs.

The issue remains that China which dominates global rare earth production has an abundance of what is known as "light" rare earths and is reported operating at less than half its mining capacity. It is the "heavy" rare earths where supply is projected to be unable to meet demand in the next decade.

This explains why the likes of Lynas are desperate to get production under way to get first-mover (outside of China that is) advantage.

But some commentators, including respected expert Jack Lifton, believe it is those with greater heavy rare-earths content that will survive beyond 2015. Or in the case of Alkane Resources, the only Australian company on his admittedly Canadian-centric list, the ability to produce rare earths cheaply as a byproduct.

pwen@fairfaxmedia.com.au

At age 74, Sir Ron is set to gain control of India Equities and chair the fund after reaching a $8.3 million purchase agreement.