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The prospect of new owners loading Auckland Airport up with debt prompted Standard & Poor's to downgrade the company's credit rating outlook yesterday - a sign that an ownership change now looks likely.
Despite indications from Auckland and Manukau city councils that they will not sell their holdings, speculation about a bidding war for control of the airport has intensified.
It is understood that a "no sale" decision by the councils will not deter any of the parties currently in discussions with the airport.
Canada Pension Plan - revealed as a potential buyer on Monday - and another as-yet-unnamed party are believed to be comfortable with the prospect of being majority owners.
That would mean some sort of new ownership structure in which the councils could keep their strategic stake holdings.
Whether the company would remain listed is unclear.
Macquarie Airports is also being tipped as a likely bidder although it has not yet engaged in discussions with the Auckland Airport board.
Standard & Poor's' Parvathy Iyer said that after weeks of speculation about takeover action, the statement by Auckland Airport required the ratings agency to issue a warning.
The revision of the outlook on Auckland Airport's A/A-1 corporate credit ratings - to negative from stable - reflected the fact that new owners would increase the risk of the company taking on more debt, she said.
And even if a takeover was not successfully concluded there was still a risk of increased debt.
"In the case of Qantas for example, the [private equity] consortium had planned to increase debt, but even when the bid failed, management said it was still progressing with a number of the changes proposed by the consortium," Iyer said.
Auckland Airport currently had relatively low debt levels so there was plenty of scope for new owners to leverage up its balance sheet, she said.
In response, Auckland Airport management said the business was "well funded with a mix of bank facilities, senior bonds, commercial paper and money market facilities".
The change to "negative" outlook had no implications for its existing financing obligations, chief financial officer Robert Sinclair said.
Meanwhile, comments by Manukau City Mayor Sir Barry Curtis have fuelled speculation that a fourth interested party may have entered the fray.
He revealed yesterday that his council had received a second proposal (in addition to CPP's) on Monday.
Airport director Mike Smith said he knew nothing about a second proposal but he would be surprised if it was made by any of the parties that the airport was already engaged in discussions with.
Curtis said last night that he had received a brief proposal from an interested party, that was not Macquarie Airports.
There was also speculation yesterday that Auckland Airport had already opened its books to at least one potential buyer.
Smith was not prepared to comment on that.
From continuous disclosure point of view the airport had nothing further to add, he said.
Auckland Airport shares hit another record high of $3.35 yesterday before closing at $3.32, up 12c for the day. They have now risen more than 50 per cent since the start of the year.
