KEY POINTS:
Infrastructure investor and Auckland International Airport shareholder Infratil is pushing bidders to take a minority stake in the airport to make the bid more palatable.
Infratil - which surprised the market last week by taking a 6 per cent stake in the airport - is in a strong
position to determine the success of any bid and has begun discussions with Dubai Aerospace and another potential bidder, Canada Pension Plan.
Dubai Aerospace (DAE) has already made an offer to acquire at least a 51 per cent stake in Auckland Airport and Canada Pension Plan (CPP) is understood to be just days away from making a rival offer.
It is understood that Infratil's discussions with DAE and CPP have focused on the possibility a deal could be done which involves the sale of a non-controlling stake in the airport.
If a foreign buyer aimed for 49 per cent rather than 51 per cent, the deal would be politically more palatable to Auckland and Manukau City Councils - which own 12.5 and 10.5 per cent respectively.
The DAE offer - which has the support of the Auckland Airport board - requires 75 per cent shareholder support to succeed.
Macquarie Bank and Melbourne Airport owner Australia Pacific Airports Corporation are also understood to be interested but have not yet engaged with Infratil in discussions and appear to be biding their time.
Infratil head Lloyd Morrison is in Europe this week but has been in email contact with DAE chief Kjeld Binger. The pair are hoping to meet face to face when Binger returns to Europe later this week.
Infratil - which declared the 6 per cent it jointly holds with the NZ Super Fund last Thursday - has said it hopes to be a long-term holder but that it is open-minded about the offer by DAE and any other potential bidders.
The two councils have a combined stake of 23 per cent and Infratil's 6 per cent stake puts that company in a pivotal position.
Since DAE made its offer valuing the airport at $3.80 a share last month there has been widespread opposition to any sale to foreign owners.
Manukau Mayor Sir Barry Curtis and Trade Minister Phil Goff have expressed their personal opposition.
Manukau City Council confirmed yesterday that it had engaged investment banking firm Cameron Partners to advise on what it described as "the multi-hundred million dollar decision around the Auckland airport shareholding". Auckland City is understood to be using PricewaterhouseCoopers.
Both councils have also had discussions with DAE and CPP.
Sir Barry told the Herald last week he expects to see another offer by the time the council begins its consultation with the public in September. Auckland City already has a public consultation process under way.
Auckland Airport shares closed up 13c at $3.15 yesterday.