KEY POINTS:
Auckland International Airport's board has had a shake-up with the election of three new directors, exposing deep dissatisfaction among key shareholders.
An existing board member, Joan Withers, felt the backlash from shareholders and was re-elected by 63 per cent, compared to 90 per cent for the leading new director.
Auckland City and Manukau City used their combined 23 per cent stake to ensure the election of their two nominees, Richard Didsbury and John Brabazon, and back Infratil chief executive Lloyd Morrison.
The councils have been frustrated at their lack of influence on the board.
Didsbury got support of 90 per cent of shareholders, Brabazon 74 per cent and Lloyd Morrison nearly 83 per cent. Investors representing 60 per cent of shares voted.
The new board members will join chairman John Maasland and directors Tony Frankham and Keith Turner.
The election followed a marathon 2 1/2-hour meeting at the Ellerslie Event Centre where takeover offers were front of mind for many of about 700 shareholders.
The board had backed an offer from Dubai Aerospace Enterprise in July which did not fly because of political opposition and then rejected an offer from the Canada Pension Plan Investment Board (CPPIB), which led to some shareholder anger at not being given the time to consider it.
CPPIB is now taking a revised offer directly to shareholders.
The Auckland City Council, with a 12.75 per cent stake in the company, voted for Didsbury, Brabazon and Morrison but against Withers.
Council finance general manager Andrew McKenzie said the council voted against Withers - the only sitting board member seeking re-election - because "we don't think the board has run a particularly good process".
Manukau, with just over 10 per cent, voted for all four nominees.
The board now faces the difficult job of presenting a unified front given its divergent backgrounds, differing views on restructuring the company to provide better returns, and pressure from an amalgamation proposal by CPPIB.
Chairman John Maasland told the questioners at the meeting he was constrained in what he could say about the Canadian offer because it was now being analysed by advisers Grant Samuel.
The board would deliver its verdict before Christmas, in the wake of CPPIB's formal takeover bid which is mailed to shareholders from December 14.
After the meeting, he had differing views on those who are now his fellow directors.
"I'm delighted with Richard Didsbury - I think he'll be a superb addition to the board, I'll reserve my decision on John Brabazon. John has very strong views, I hope he'll be a good team player. So far as Lloyd is concerned and while clearly there will be some conflicts ... I think he'll bring some good qualities.
"A board can cope with a lot of different opinions once you get the team work going and the thing flowing. I'm quite content we'll get a solid board."
Given the CPPIB offer, and other suitors who were now actively being sought, Maasland acknowledged there could be further changes.
Head of research at Forsyth Barr Rob Mercer said the new board members all backed capital restructuring and ownership changes but to varying degrees.
Auckland City nominee Didsbury was a founder of Kiwi Income Property Trust which he said had a conservative attitude to debt.
The company kept debt at about 35 per cent of assets. "When things go wrong they all go wrong at the same time," he said.
Manukau's nominee Brabazon said a more efficient capital structure was needed as the status quo was unsustainable.
The former Brierley executive said he favoured a majority New Zealand shareholding of at least 51 per cent.
Infratil chief executive Morrison faced questions from shareholders about any conflict of interest given his company's majority ownership of Wellington Airport and his involvement with proposals for commercial aircraft at Whenuapai.
Morrison told the meeting he would resign his seat on the Wellington board if elected to the Auckland board.
Morrison's company, Infratil had built up a $300 million stake in Auckland Airport, but nothing in Whenuapai.
However, although the alternative airport was still just an idea he said he thought it was in Auckland Airport's interest to see it developed.
He said he would explore the idea with fellow directors and management and if they found it was not worth pursuing he would respect that.
He said he was absolutely "crystal clear" that he would be acting in the interests of all Auckland shareholders.
Maasland also announced chief executive Don Huse will step down.
Huse, 61, has worked in airports for nearly 17 years and will quit some time before the company's next annual meeting in October 2008. He became chief executive of Auckland Airport in 2003 after working as chief financial officer of Sydney Airport and chief executive of Wellington Airport for most of the 1990s. Huse, who started when passenger numbers were hit by the Sars scare and fallout from the early stages of the Iraq war, embarked on an ambitious building programme and is regarded as a decisive leader.
