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The Canada Pension Plan Investment Board (CPPIB) is confident it will succeed in buying a 40 per cent stake in Auckland Airport, following news yesterday that it is now the only bidder in the hunt.
The Auckland Airport board said yesterday that the mystery bidder it began talks with in December had now pulled out of discussions.
CPPIB has already launched a bid for the partial stake offering $3.655 per share in a deal which is also dependent on a majority of shareholders voting to approve a sale.
Yesterday the airport board also revealed shareholder votes representing 4.59 per cent of the total shares in the company had been received. Of those votes more than 76.6 per cent were against CPPIB acquiring the stake and 23.4 per cent are in favour.
CPPIB vice-president and head of infrastructure Graeme Bevans was unconcerned by the results so far and noted that a high percentage of the votes received had come in from retail investors advised by ABN Amro Craigs - a brokerage which has not recommended the deal to its clients.
Of more significance was the large percentage of shares held by institutional investors - who typically didn't make a final decision until right before the offer deadline. The CPPIB offer does not close until March 13.
Bevans said the global market meltdown of the past six weeks, which had seen share prices fall across the board, was making the bid look more attractive to shareholders.
Auckland Airport shares were now trading more than 10 per cent lower than when the offer was made in December, he said. The shares closed at $2.70 yesterday.
"Some of the institutions will take the view that selling out at a higher price and then buying back later on at what could possibly be a lower price will be a very attractive opportunity," Bevans said.
It was not surprising to hear CPPIB talking up its chances of success, said Paul Ridley-Smith of investment company Infratil, which opposes the sale.
"Its the job of the bidder to talk up the likelihood of success," he said.
But Ridley-Smith expressed scepticism that institutional shareholders would be looking to take advantage of market conditions by selling in to the offer.
