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Auckland's two largest cities are considering offers for stakes in the country's busiest airport which could net them more than $860 million.
The airport company disclosed yesterday it was aware of approaches by the Canadian Government's mega-pension fund - which has worldwide investments worth $144 billion - to "certain shareholders" to buy their holdings in Auckland International Airport for $3.10c a share before a possible takeover bid.
The Auckland and Manukau city councils issued statements saying they had received approaches about their holdings, which total 22.8 per cent of the airport company.
Auckland City has 12.75 per cent, worth $483 million at $3.10 a share.
Manukau has a 10.05 per cent holding, worth $380.5 million.
But that value increased yesterday as the airport's share price leapt 48c to $3.30 once the Canada Pension Plan Investment Board's move became public. The shares then eased slightly to close at $3.20, up 38c.
Auckland City Council finance committee chairman and City Vision political co-leader Vern Walsh said his council was aware that others were also interested in the airport.
The airport handles more than 30,000 passengers daily, and more than 11 million passengers - including 70 per cent of visitors to New Zealand - pass through its departure and arrival gates each year.
But although councillors have been gagged by a confidentiality agreement, several spoken to last night were wary of selling the city's stake in such strategic infrastructure.
Auckland City sold half its original airport holding for $190.8 million in 2002 under former mayor John Banks and used the money to repay debt.
Manukau Mayor Sir Barry Curtis was also cool towards the Canadians, saying that although his city was reviewing the offer, it would be "quite improper" to conclude it was considering selling its shares.
But rebuffs from the two councils would not automatically send the Canadians packing, as it is understood they may be willing to buy from other shareholders even if the airport remained partly in public ownership.
Auckland City Mayor Dick Hubbard suggested a possible sale of council shares last year, to help to pay for parks, transport and other infrastructure in the Tank Farm waterfront redevelopment.
Papers obtained by the Herald this year show that selling airport shares was among several options, including steeper "charitable payments" from Metrowater, for financing $2.3 billion of new works in a 10-year council plan.
Mr Hubbard and Deputy Mayor Bruce Hucker said yesterday that it would be inappropriate to comment on the Canadian approach, and deferred to Mr Walsh as the council's spokesman on the matter.
Mr Walsh said the council needed to give careful consideration to all options for the city's shares.
"We need to make sure that whatever we do with this investment provides the best outcomes for ratepayers in the long term."
Councillors had to sign a confidentiality agreement at their monthly meeting on Thursday night before being briefed on the Canadian approach.
City Vision member Cathy Casey said she had to leave the meeting after refusing to sign an agreement.
It is understood the agreement was provided by agents for the Canadians, and it sought to make councillors personally liable for any financial losses caused by information leaks.
