KEY POINTS:
It's difficult to know what Auckland International Airport was talking about when it revealed it was "in discussions" with various parties.
Those discussions, the airport said in a release to the market on Monday, are about "value enhancing opportunities including acquiring an ownership interest in [the airport] and supporting the strategic development of [the airport]."
But what does supporting the strategic development of the airport mean?
Auckland Airport already has a detailed 20-year masterplan for the use of its land. Presumably if they're unhappy with that plan - released last year - they'd come up with a new one, without the help of a pension fund or infrastructure investor.
Perhaps supporting the strategic development means the new investors could provide an injection of capital for the plan, perhaps to bring it forward.
But if the airport needs more capital, it could easily raise cash at a good price with a bond issue - the airport's long-term stable cashflows that make it so attractive to the "parties" the airport is talking to also make it attractive to bondholders.
And what are these value-enhancing opportunities? Is it to be the value of the shares that is to be enhanced, perhaps through a takeover bid?
We all know what "acquiring an ownership interest" means. It suggests the airport is evaluating takeover bids.
Certainly Auckland Airport's advice to shareholders suggests as much. "The board recommends to shareholders that they don't sell their shares in [the airport] as doing so would risk foregoing the value upside associated with the above mentioned opportunities or a contested offer, should one eventuate."
Two shareholders who won't need that advice are Auckland and Manukau councils, which between them own nearly a quarter of the airport. Anyone launching a takeover would have to work around these two shareholders, which could be years away from selling.
There are believed to be four parties interested in the airport. So far the only one we know about for sure is the Canada Pension Plan Investment Board, which the airport named on Monday.
The others still have the benefit of anonymity - although Macquarie Airports is almost certain to be interested as well.
The Canadians were named after they offered institutional investors $3.10 each for their shares.
The Auckland Airport board reasoned that the offer was known to some investors, but should be known to all, hence Monday's announcement.
The other parties the airport is in talks with have signed agreements not to acquire any shares while the talks are on, so do not have to be named by the airport.
Whether being so publicly named and having their $3.10 a share price out there in the market puts the Canada Pension Plan at a disadvantage remains to be seen.
Hearty burgers
After I read the Burger Fuel prospectus, I wanted to rush out and buy one of their burgers, but it certainly didn't make me want to buy their shares.
While that document - available in all Burger Fuel stores - has several enticing photographs, it doesn't make for pretty reading. Burger Fuel plans to raise $15 million for a quarter of the company, giving it a market capitalisation of $60 million. Yet in the year to March the company earned just $4.5 million in revenue.
For their money, shareholders get shares in Burger Fuel Worldwide, which owns both Burger Fuel - the New Zealand arm - and Burger Fuel International - effectively the Sydney arm with international aspirations.
The Sydney arm has only been established in the past couple of years, but the New Zealand arm has been running for 12 years, so should give a good indication of how profitable this business is.
It has 19 stores, all but one of which are franchises. For some reason the latest financial statements aren't included in the prospectus, but they reveal that Burger Fuel New Zealand earned revenue of $4.3 million and made a "trading surplus" of $186,499.
If we add back interest payments and depreciation of $190,045 we get earnings before interest, tax, depreciation and amortisation - or something like it - of $376,544. If we then put Burger Fuel International's operating loss to one side, this puts the float on a multiple of 160 times earnings.
That doesn't look enticing, to say the least, though Burger Fuel might argue it is reinvesting in the business rather than trying to generate profits.
And as executive director Josef Roberts says in the prospectus, value is what you decide it is.
"Value rationale is constantly changing; what is clear is that a company's ultimate value is set not just by the accountants, but the people wishing to own it," he writes in a letter to potential shareholders.
Still, a few more details in the prospectus for those of us who care about old-fashioned things like earnings and profit forecasts would have been nice. In fact, the word "earnings" appears on only four of the prospectus' 98 pages. What investors in Burger Fuel Worldwide get is essentially a brand that its promoters believe "is set to become a global icon".
Its point of difference - as the marketing jargon goes - is "its innovative and energetic brand as well as superior taste, flavour, quality and the approach we take to ensuring the Burger Fuel experience is a very special one".
Maybe, but we're still talking about a meat pattie in a bun with some salad, jazzed up by Burger Fuel with exotic ingredients such as blue cheese, peanut sauce or fresh pear.
This is not to belittle the achievement of Chris Mason, Burger Fuel's founder. Starting a business that now has 20 outlets including one in Sydney is no small matter and more than many of us will achieve.
The concept has done well in this country, but even at the gourmet end of the market fast food is a crowded segment with a low cost of entry.
Whether Burger Fuel would have the same success overseas is far from certain. While the prospectus contains no earnings forecasts, on page 56 there's a handy guide showing what its revenue would be for various numbers of stores.
If it had 1000 stores around the world - yes, 1000 - which each sold $1 million worth of burgers it would earn $60 million in franchise fees and $40 million in marketing levies for a total of $100 million in ongoing annual revenue.
Now if they could just get 10 per cent of the Chinese market ...
Roberts, who introduced the Red Bull drinks into New Zealand and Australia, invested in Burger Fuel in 1993 and "made the decision to invest based not only on business fundamentals, but also with my heart".
Those who decide to invest in Burger Fuel will be doing so with their hearts.
* Christopher Niesche is business editor of the Herald.
