KEY POINTS:
Manukau City Council has signalled its opposition to a Canadian partial takeover proposal for Auckland Airport (AIA).
Manukau Mayor Len Brown said the council accepted that aspects of the takeover offer were attractive and acknowledged that the Canada Pension Plan Investment Board (CPPIB) had similar values.
But as
a whole the offer did not measure up to the council's criteria for its shareholding in the airport.
Mr Brown said the council also acknowledged the offer would meet some of its criteria including the maintenance of its shareholding, continued development of the airport and retention of listing on the NZX.
But it would lead to a single foreign shareholder having a controlling interest and therefore the council must reject it.
Manukau City Council and Manukau City Investments (McI), as owners of the council's shares in AIA, were united in their view that the takeover offer should not go ahead.
Lomond Seel, MCI chairman, said his company was concerned that CPPIB brought little in the way of direct airport experience and had limited expertise to contribute to the airport's growth strategy.
The board of AIA indicated it did not see that the introduction of CPPIB would assist AIA in any material way.
"I support the board's opinion as we also see benefits in establishing a synergistic relationship with a partner which has global connections and associations to bring additional airport expertise or tourism opportunities to the company," Mr Seel said.
Mr Brown said the council consulted this year with the Manukau community, and residents sent a strong message that the airport company should remain in NZ hands and the council should retain its shareholding.
"The airport is too important to Manukau, the Auckland region and New Zealand for a single, and foreign, shareholder to have a controlling interest," Mr Brown said.
"This council needs to be confident that any new investor can contribute substantially to the airport's performance, through new business, technology, people, expertise and capital, as well as through restructuring the company's finances. It is not certain that CPPIB will be able to bring this to the airport.
"We must not lose sight of the company's extensive property portfolio, its position as a major employer in the region and that it is a vital transport hub, all within Manukau.
"These factors make it even more important that AIA remains a New Zealand-controlled company.
"As a long-term holder of shares the council is also concerned that if the partial takeover offer succeeds there remains uncertainty as to whether a subsequent yield enhancing restructuring as proposed by CPPIB can actually be implemented."
Mr Brown said the council and MCI noted the board of Auckland Airport was optimistic about the value of the airport and the way in which it was positioned to benefit from growth in aviation.
"This supports our position to retain our shares in AIA so that New Zealand can continue to benefit from growth in the long term.
"Ultimately, we want the company to be in the best position to take advantage of financial and operational opportunities to maximise value for its shareholders, while respecting the requirement that it remains in majority New Zealand ownership."
Mr Brown said the council, like any responsible shareholder, would continue to consider its position as events unfolded.