KEY POINTS:
The Canadian bid for a 40 per cent stake in Auckland International Airport got a big boost last night with Infratil deciding to back it.
In the latest twist of the sale saga, the Wellington-based airport and utilities company said it would sell its 3.3 per cent stake into the offer and vote in favour of it after long-standing opposition to the bid.
Infratil's Paul Ridley-Smith said it "was definitely a hard call".
"We try to take a principled and ethical approach to investing and I think we've done this here but at the end of the day you've got to make decisions carefully and rationally.
"In this circumstance with the concessions the Canadians have made in the last few days we're comfortable the right decision was to vote yes. We think our shareholders will definitely understand that."
Before the slide in world markets Infratil had maintained the $3.65 offer price from the Canada Pension Plan Investment Board was too low and throughout the bidding process said it would prefer to see a competitive process started afresh.
On Monday the CPP announced it would limit its voting rights to 24.9 per cent in an attempt to head off Government moves to knock the bid back on control grounds. Two Government ministers will still rule on the partial takeover given the size of the CPP's stake in the airport.
Ridley-Smith said the CPP's voting power move was compelling.
"It means if other shareholders don't like what they're doing they will have sufficient votes to make change."
Infratil's assets include Wellington Airport, European airports and a 50 per cent stake in TrustPower. It also has a stake in Auckland Airport with the NZ Superannuation Fund.
Chief executive Lloyd Morrison was appointed to the airport board last year.
Ridley-Smith said he did not expect any backlash for the change in stance.
The New Zealand Superannuation Fund would make its own call on whether to sell its stake, he said.
The CPP's infrastructure chief Graeme Bevans, said: "We are pleased that Infratil has seen the value and merits of the offer."
Infratil is an influential shareholder which could have a bearing on late returns from small retail investors who have until 5pm tomorrow to return their forms. It could be Friday or even later before the result is known if the vote is close.
Strong backing for the CPP would put additional pressure on Associate Finance Minister Clayton Cosgrove and Land Information Minister David Parker in a decision on national interest and sensitive land grounds.
Speaking outside the Petroleum Conference in Auckland yesterday, Parker would not comment on specifics of the Canadian bid but said they had been given the opportunity to respond to the implications of the new regulations covering strategic assets.
"Thereafter the Overseas Investment Office will process the application and it will be forwarded to ministers to make a decision. We're not putting a set time frame on it."
Meanwhile, the Manukau City Council's stance on their shareholding remains fixed.
At an extraordinary meeting yesterday afternoon , the Council decided to affirm its position not to support the Canadian Pension Plan Investment Board (CPPIB) offer, or its amended proposal, and to vote against it.
Mayor Len Brown says the decision was made after considering the CPPIB statement regarding its voting rights.
"This proposal is a lot closer to the council's position and we appreciate that. However, it is the council's view that the proposal is still not in the best long-term interests of the airport, the city and its residents," Mr Brown says.
"Our decision is based on the criteria we consulted on with our residents. They have made it clear what their preference is for our shareholding in this nationally important strategic asset within Manukau. We must respect that."
Auckland International Airport shares closed up 3c at $2.28.
