John Durie: Equity stakes in Port of Geelong bid likely to change to acquiesce to ACCC concerns

The Spirit Super-controlled bidding consortium for the Port of Geelong is set to change to clear concerns from the Australian Competition and Consumer Commission (ACCC) over the $1.2 billion deal.

The port is a key terminal in shipping between Tasmania and the mainland, as well as bulk trade from Victoria. 

The ACCC is due to make its decision this week, with the main concern centred on Palisade Investment, which was to manage 49% of the consortium, with the rest by Tasmania’s largest profit-for-member fund, Spirit Super.

Palisade’s controls 100% of the Port of Portland, which is close to Geelong, and the two ports are biggest bulk ports in Victoria.

Palisade was slated to manage a 24% equity stake owned by Commonwealth Super, as well as its own 25% investment in the purchase from a consortium managed by Bookfield.

This worried the ACCC as it had the potential to control bulk shipping from Victoria and hold market power over trade between Tasmania and the mainland.   

A likely solution is to drop the Palisade management agreement, so it would then have just 25% of the Port of Geelong.

The Port is already a centre for trade between the mainland and Tasmania and it will take on more importance later this year when it replaces Port Melbourne as the base for the state government controlled Spirit of Tasmania, which is a major  daily freight and passenger service between the mainland and Tasmania.

Spirit Super is the biggest profit-for-member fund in Tasmania so the deal is important for its members.

In June, just before the ACCC was to make its final decision, the bidders withdrew their submission to the ACCC.

After the ownership was rejigged, the ACCC started its investigation again earlier this month and a decision is now due on Thursday.     

The bidding consortium was not available for comment on any changes to the bid when contacted by SmartCompany.