* Brookfield, Qube may make joint bid - Asciano
* Move could circumvent regulatory hurdles - lawyers
(Recasts, adds quotes, shares)
By Byron Kaye and Swati Pandey
SYDNEY, Feb 23 (Reuters) - Canada's Brookfield Asset
Management Inc BAMa.TO and its Australian rival are weighing a
joint A$9 billion ($6.5 billion) bid for Australia's biggest
rail and port operator, an unusual measure aimed at ending the
fiercest takeover battle now raging in the Asia Pacific after
seven months.
Target firm Asciano Ltd AIO.AX revealed on Tuesday that
Brookfield and the company it has been bidding against,
Australian cargo handler Qube Holdings Ltd QUB.AX , have
entered talks about a possible joint offer.
The ceasefire, if it leads to a concrete offer, would deny
the rival firms full control of the Australian freight giant but
would spare further delays in clinching a deal as they outbid
each other.
It could also circumvent a run-in with regulators,
particularly the Foreign Investment Review Board, as the
proposal under discussion involves giving Brookfield and Qube
joint ownership of Asciano's ports - which the government views
as strategic assets that should remain in Australian hands -
while their foreign bid partners would own the railways.
Reuters previously reported that Brookfield has partnered
with the Qatar Investment Authority and the Canadian Pension
Plan Investment Board, while Qube has teamed up with
government-owned China Investment Corp. CIC.UL
"Any proposal for more Chinese interest in ports would be
likely to be sensitive," said an M&A lawyer who also asked not
to be named because of the sensitivity of the matter.
"Provided this aspect is managed well, I expect that FIRB
would be fine with what I understand to be predominantly
Canadian and Australian interests taking control of these
assets," they added.
Qube shares rose more than 10 percent on hopes that a joint
offer might end the stand-off. Asciano shares rose 1.5 percent.
Brookfield declined to comment on the proposal while a Qube
spokesman was not immediately available for comment.
A week earlier, Asciano quit its support for the stand-alone
bid Brookfield made last July after Qube upped its counter-offer
and added CIC to its consortium. Brookfield responded that it
would raise its bid and take in outside investors.
On Tuesday, a source familiar with that situation told
Reuters that since then, Brookfield and Qube had started talks
aimed at a joint proposal that would give Brookfield and Qube
joint ownership of the ports and their bid partners the railway.
The proposal would also distance Brookfield from Asciano's
railways, as Brookfield already has rail assets in Australia.
"It's just about short circuiting what was going to be a
long and involved and potentially costly process between two
parties who clearly wanted the asset badly," said the source,
who asked not to be named because of the sensitivity of the
situation.
Asciano said the discussions remained preliminary and that
it would continue to recommend Qube's proposal in the absence of
a higher bid.
($1 = 1.3833 Australian dollars)