QIC drops out of Port of Brisbane bidding

The Brisbane-based investment fund and stake holder has failed to attract co-investors needed for an offer on the 26.7 per cent share of the port being shopped by a New York-based seller.

QIC Ltd, an investment firm with $74.3 billion in funds under management, has abandoned efforts to acquire a majority stake in Queensland’s biggest port after failing to persuade other investors to share the risk and reward of buying Global Infrastructure Partners’ shareholding in the port.

The New York-based seller stands to make a return of at least 50 per cent on its investment after it paid $614.1 million for a 26.7 per cent stake in the port in November 2010, as did Brisbane-based QIC and IFM Investors Ltd. Abu Dhabi Investment Authority has a 19.9 per cent shareholding.

QIC and Melbourne-based IFM have the right of first offer for the stake being sold by Global Infrastructure Partners, an investment fund run by former Credit Suisse bankers. IFM has made a bid, though its value has not been made public. 

Global Infrastructure Partners hired Morgan Stanley to see if it could get a higher price for its stake than IFM has offered. The New York firm has seen the value of its investment climb in the three years since the state sold assets in the aftermath of the global financial crises, but it has declined comment on what the stake is now worth.

The Queensland government sold the Brisbane port for $2.3 billion as part of a plan to fund other infrastructure projects. The Port of Brisbane’s owners have a 99-year lease to operate the port, which has 29 operating berths and more than 7,200 metres of quay line. This has attracted investment funds and infrastructure operators and investors from around the world to examine the operations and finances of the port.

Global Infrastructure Partners may make a decision as early as this month or next on which bidder has been successful. QIC, IFM, Global Infrastructure Partners and Morgan Stanley declined comment or did not return calls seeking comment. Potential buyers of the Global Infrastructure Partners stake in the port declined comment when contacted by DataRoom.

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