KEY POINTS:
Canada Pension Plan - the foreign investment fund which is just days away from lodging an offer for Auckland Airport - faces a tough task getting the support of key shareholder Manukau City, a new document shows.
The council, which holds a 10.5 per cent stake - has published its objectives for any changes to its long-term strategic plan.
It is seeking public submissions on amendments to the plan that could allow the sale of airport shares.
One of the objectives outlined in the document is that the airport should not have a single controlling shareholder.
The Canadian Government-owned investment fund has differentiated itself from the failed Dubai Aerospace (DAE) offer by seeking a minority stake of 49 per cent in the airport, instead of 51 per cent.
But the Manukau City document says "a controlling shareholder would probably have more than 30 to 35 per cent". CPP is understood to have told key shareholders it is not prepared to proceed with a stake of less than than 40 per cent.
The issue is likely to be a key bargaining point for shareholders when the CPP offer is formally put forward. Two weeks ago CPP confirmed it was close to making an offer.
The idea that 30 to 35 per cent would effectively be a controlling stake is in line with views put forward by Wellington-based investment company Infratil - which holds a 6.2 per cent airport stake in partnership with the New Zealand Super Fund.
Infratil has indicated it sees a holding above 40 per cent as being effectively a controlling stake.
Auckland City - which holds a 12.75 per cent stake in the airport - has already voted to amend its strategic plan to allow its shareholding to be restructured if an ownership proposal adds commercial value.
The CPP proposal is likely to be a scheme of arrangement, like the DAE offer, which would require approval from at least 75 per cent of total shares to proceed.
