KEY POINTS:
Conditional owner of 40 per cent of Auckland Airport, the Canada Pension Plan Investment Board, says it wants to work closely with the Cullen superannuation fund here and overseas.
A majority 57.7 per cent of all votes received from investors endorsed the CPP's $1.8 billion partial takeover bid,
leaving it to Cabinet Ministers David Parker and Clayton Cosgrove to make a final decision on foreign control grounds.
Yesterday Canadian pleasure at getting over the line convincingly with shareholders was tempered by prospects of a tough struggle to convince the Government the deal fits stricter foreign investment rules imposed without warning last week.
The CPP's vice-president, infrastructure investment, Graeme Bevans, said he hoped for a Government ruling before the April 11 deadline for the ministers' ruling. "It's not in anyone's interest for the process to take too long." Yesterday he had meetings with Auckland Airport board representatives, Infratil and the New Zealand Superannuation Fund which announced it had sold its 6 per cent stake into the deal and voted to support the CPP.
Bevans said his organisation has a very close relationship with NZ Super - known as the Cullen Fund - which at last count was worth around $13 billion with 76.7 million shares in Auckland Airport.
"We would be very strongly encouraging of them to increase their holding over a time in the airport and have a director or representative on the board - whatever they choose to do," Bevans said.
"We see them as a great partner for us both here in Auckland particularly and other investments overseas."
While the CPP was 10 times as big as its New Zealand counterpart, the two pension funds had similar structures and relationships to their respective governments.
Macquarie Equities investment director Arthur Lim said with the gains made on selling to the Canadians, it was possible the New Zealand fund would build up a 10 per cent stake. "It's possible they could get up to 20 per cent," he said.
Bevans said if the Cullen fund wanted to direct invest "we'd be keen to participate with them".
During a round of media interviews he emphasised the CPP was confident the scaling back of voting rights would meet stricter new foreign control restrictions.
He also stressed the CPP would have just two directors on the board.
Auckland Airport chairman Tony Frankham said: "The reduction in voting power is what tipped the balance and allowed them to get over the line. We will accept it if the ministers approve it."
Bevans, originally from Tasmania, said working on deals like the airport bid was like running a marathon.
"It has its challenges and sometimes it becomes an ultra marathon. You have to have the grit and determination to see it through."
STAKEHOLDERS
* NZ organisations' shareholding immediately after a sale
* NZ Super Fund: 2.23%
* Infratil 1.12%
* Auckland City 12.74%
* Manukau City 10.04%
WHAT DO INVESTORS GET?
* The Canadian deal looks set to deliver a value of about $3.18 per share for Auckland Airport shareholders who accepted.
* The Canadians offered $3.655 per share for 39.2 per cent of the company (they already owned 0.8 per cent).
* Because acceptances of more than 39.2 per cent were received the offer will be scaled back.
* In other words shareholders only get to sell a percentage of shares into the offer - that percentage is based on the level of acceptances (currently 62.5%) divided by the required number (39.2%).
* Based on acceptances (to date) a shareholder who had 1000 shares and who opted to sell all their shares to the Canadians will actually only sell 627 at the price of $3.6555.
* They keep the remaining 373 which have a market value of $2.40 as of yesterday's close.
* Based on the sale price and the current market price, the shareholder has been delivered a theoretical value of $3.186 per share courtesy of the Canada Pension Plan.
* Now it's over to the Government to determine whether anyone gets to bank a cheque.
