KEY POINTS:
The Canada Pension Plan Investment Board (CPPIB) is promoting its partial takeover offer for Auckland International Airport (AIA) as being "at the very high end of comparable international airport valuations".
The offer, which would take CPPIB to a 40 per cent stake in the airport opens today, with documents now being mailed to shareholders.
They are being offered $3.6555 per share, which CPPIB said was a premium of 31 per cent or 85.55c over the share price at market close yesterday.
It was also a premium of 50 per cent above the volume weighted average trading price in the month to May 4, the day before to takeover speculation, CPPIB said.
The bid is CPPIB's second attempt to buy into the airport, coming after the airport board in October decided against a deal which would have created a newly listed company, in which CPPIB's stake would have been between 39 per cent and 49 per cent.
CPPIB is one of two players to have made a run at Auckland airport this year. The other was Dubai Aerospace Enterprise which in September pulled out of a bid for between 51 per cent and 60 per cent of AIA.
CPPIB said today its current offer re-confirmed its consistent stance of seeking only a minority stake in AIA.
It pointed out it had entered into a deed restricting its voting rights on resolutions to elect and remove directors of AIA to just 30 per cent of the votes that may be cast on those resolutions in order to comply with certain regulations governing its investments.
That meant that with a 40 per cent holding in AIA, it would only be able to vote 25.7 per cent of the total number of shares in AIA on resolutions to elect and remove directors, CPPIB said.
Takeover Code rules also require that more AIA shareholders must approve the offer than object to it.
If its offer is successful CPPIB plans to seek to have an amalgamation proposal put to the airport's shareholders.
The amalgamation would be conditional on support of the AIA board, and require the approval of 75 per cent of shareholders.
Under that proposal each AIA shareholder, excluding CPPIB, would receive 20c cash per share and a stapled security made up of an ordinary share issued at 70.55c and a convertible note issued at $2.75.
A new bank facility would be drawn down initially to take the amount of the new group's net external debt to $1.3 billion, CPPIB said.
That compared with AIA's existing external debt which was estimated by CPPIB to be about $1b at the end of the 2008 financial year.
The proposed structure was consistent with best practice for listed infrastructure investments internationally. It would provide for ongoing efficiency in the airport's balance sheet while maintaining debt at prudent levels, CPPIB said.
At mid-morning today AIA shares were up 10c to $2.90. CPPIB's offer will remain open until March 13.
- NZPA
