US-based rail firm Genesee & Wyoming has dismissed claims Aurizon was owed a right of first refusal prior to the announced sale of G&W’s Australian assets to Macquarie Infrastructure and Real Assets (MIRA) and Dutch pension fund manager PGGM.
In a short statement to the New York Stock Exchange, G&W acknowledged the legal action taken on September 17 by Aurizon, seeking to interrupt the sale of 51 per cent of G&W Australia to MIRA and PGGM.
It rejected the idea Aurizon had any right to block the deal, however.
“[G&W] disputes the allegations made in the complaint and intends to defend itself appropriately,” the company said. “[G&W] undertakes no obligation to provide further updates and does not intend to comment further regarding the aforementioned matter.”
G&W announced plans on August 6, 2019, to sell its 51 per cent stake in G&W Australia to MIRA and PGGM. G&W sold the first 49 per cent of the business to MIRA and PGGM in 2016.
In an application made to the New South Wales Supreme Court, however, Aurizon claims both sales violate “long-standing contractual” commitments made by G&W.
Aurizon says it has a Rights of First Refusal Agreement signed in 2006, when it acquired the above-rail assets of the Australian Railroad Group from G&W and Wesfarmers.
G&W remains resolved to conduct the deal it has announced.
The sale of G&W Australia is a moving part in a larger deal: in July, it was announced G&W’s global business would be acquired by Brookfield Infrastructure and GIC in an $8.4 billion transaction.
While it has not been specifically stated, it is likely concerns over a potential rebuttal from the Australian Competition and Consumer Commission drove the desire to sell G&W Australia to make way for the larger deal.
“As previously disclosed, the Company expects the transaction pursuant to which affiliates of Brookfield Infrastructure and GIC will acquire the Company to close by year end or early 2020, subject to customary closing conditions,” G&W said.