Brambles Becomes A Palatable Holding

IN THE looming race for Brambles, the field is set and the runners are in their gates. Now someone just has to blow the starters gun.

Mark Rowsthorns Asciano Group has positioned itself to have the inside running for Mark Ihleins pallets giant, by amassing a 4.09 per cent stake in Brambles.

Its a cheeky move by the Toll Holdings spin-off, and may have more to do with disrupting Tolls own designs on Brambles coveted CHEP pallets business.

Toll boss Paul Little hinted as much last month. "This is not a new initiative," he said of Ascianos purchase. "A Brambles acquisition was clearly there on the drawing board before we (Toll) had restructured the company."

Relations between Rowsthorn and Little have soured since the pair parted ways, at the behest of the Australian Competition and Consumer Commission, after conquering and dividing Patrick Corp together.

Joining Rowsthorn is the team at Macquarie Bank, which last month did the dirty work in amassing the 4.09 per cent stake on behalf of Asciano via a network of subsidiary companies.

Also in Rowsthorns camp is law firm Clayton Utz , which did much of the work on Tolls takeover of Patrick. Clutz, as it is known, seems to have picked sides in the wake of the Little-Rowsthorn divorce.

Despite holding the biggest slice of Brambles, Rowsthorn is not going to enjoy a clear run.

Toll has also showed up on the Brambles share register, with a much smaller 0.4 per cent stake. But it is moves on Ascianos own share register that will have Rowsthorn concerned.

Ascianos share price has been slipping. From a high of $11.43 in June, it closed yesterday at $8.75.

The biggest slump in the share price came in August, but it wasnt just the US subprime crisis that affected its share price.

Ascianos largest shareholder, US fund management giant The Capital Group, dumped 4.7 million shares, or more than 1 per cent of Ascianos shares on issue, right in the middle of Rowsthorns buying spree.

Commonwealth Bank has also sold almost 10 million Asciano shares in the past fortnight. Buying many of those Asciano shares is Melbourne-based listed investment vehicle Australian Foundation Investment Company. It has emerged on Ascianos share register as owning 8.42 million shares, or 1.2 per cent of the stock.

But there is also another mystery buyer — which has the market abuzz with rumours that Brambles is building up its own stake in Asciano.

Brambles, after all, has a market capitalisation of $20 billion, compared with Ascianos $5.7 billion, and falling.

"They (Brambles) could do it," said one Citi broker. "They have the financial clout to turn up the heat on Asciano."

Ihlein has seemingly limited his defence to a Paul Revere impersonation, shouting "the Rowsthorns are coming" with each successive Asciano purchase in his company. But his horse hasnt bolted yet.

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