KEY POINTS:
The Canada Pension Plan Investment Board says it has come up with three options for acquiring a significant minority stake in Auckland International Airport Ltd.
They include an all cash option of $3.70 per share, the CPP board said today.
The other two options, which would provide a value of up to $3.90 per share, would involve a combination of cash and the issue of new securities that provided enhanced returns while preserving the investment grade rating of AIAL.
The CPP Investment Board today said it was confirming that it intended to submit a proposal under which it would acquire a significant minority stake in AIAL.
Following a statement this month, it confirmed it had formulated a framework for an amalgamation that it would discuss with AIAL at a meeting scheduled for tomorrow, CPPIB said.
It said it also advised that it had received committed financing in respect of its proposal.
Each of its three options for buying shares could be subject to some scaling, depending on shareholder take-up of the various options, CPPIB said.
AIAL today said it had not received a proposal from CPPIB.
"Should a proposal be received from CPPIB, the directors of Auckland Airport will consider the proposal and obtain expert advice on its merits before being in a position to make a recommendation to shareholders. This could take some time," AIAL said.
When it announced its intentions early this month, CPPIB made it clear that it did not need control, that council shareholders would not be diluted and the airport company could stay listed.
It had a point of difference to the then faltering, and now scuppered, bid from Dubai Aerospace Enterprise (DAE), which in July offered to buy between 51 per cent and 60 per cent of AIAL in a complex $2.6 billion offer.
When CPPIB made its intentions known, DAE was already looking for a way out of its bid, which had aroused widespread concern about overseas control of a key piece of infrastructure.
A few days after the Canadians first went public DAE and AIAL announced that in light of the circumstances, they had no alternative but to pull their agreed "merger".
The termination was on a mutually acceptable basis, including that each party bears its own costs.
DAE's deal had needed the backing of 75 per cent of shareholders and was to have been voted on in November after the local body elections.
Key shareholders, Manukau City Council with 10.05 per cent and Auckland City Council with 12.75 per cent, had said they would hold their stakes.
AIAL shares were up 31c to $3.35 in early trade today.
- NZPA
