Port wealth flowing back to public

Ports of Auckland will return to full public ownership after a takeover bid by Auckland Regional Holdings jumped a crucial hurdle.

ARH said 3200 Ports of Auckland shareholders had accepted its $8-a-share offer, taking its stake above 90 per cent. That will allow ARH, part of the Auckland Regional Council group, to move to compulsory acquisition of the rest of the company's shares once its offer closes on July 15.

Full ownership is expected to be taken by August, bringing to an end the port company's 13-year stock exchange listing.

Ports of Auckland floated on the sharemarket in 1992 with the sale of 20 per cent of Ports of Auckland shares by the Waikato Regional Council. The Auckland Regional Council held on to its 80 per cent stake - and will now move to full ownership through ARH.

ARC chairman Michael Lee said the passing of the milestone was "a historic day for Auckland".

"The public buyback of 100 per cent of Ports of Auckland is momentous and a vindication of those who fought so hard against privatisation in the early 90s," he said.

Mr Lee said wealth generated by the ports would be vital for funding Auckland's future infrastructure needs.

Most of the profits generated by Ports of Auckland will be earmarked for transport. It is the main investment of the ARH, a special purpose entity which also owns a Viaduct property company, America's Cup Village, and Northern Disposal Systems, the shell of a small waste company that holds some resource consents.

ARH has total assets of $1.3 billion.

ARH chief operating officer Peter Casey said the investment body would distribute $1 billion to the ARC over the next 10 years. Of the money it gives to the council, 85 per cent must be used for stormwater or transport plans, mostly transport, with council money in turn flowing to the Auckland Regional Transport Authority.

The authority's present focus is on public transport.

Mr Casey said it would be business as usual for Ports of Auckland. "ARH does not currently intend to make any material changes," he said.

"This has been a good investment and we have a long-term perspective on the business. Ports of Auckland is of significant importance to the Auckland region."

The port does face some uncertainties. The proposed merger of heavyweight shipping lines Maersk and P&O Nedlloyd has put the brakes on a decision by P&O to consolidate its port visits to either Ports of Auckland or Port of Tauranga. Maersk is more regionally focused and calls at a number of ports.

There has also been some speculation that the motive for ARH's bid was to secure Ports of Auckland's blue-chip waterfront property, with Australian transport company Toll Holdings admitting it would be interested in running the port operations should it be given a chance.

Mr Casey would not be drawn on those issues, other than to say Ports of Auckland was operating in a competitive environment.

"In a competitive environment there will always be things on the table. All markets are changing all the time."

But the ARC's Mr Lee said there were "absolutely" no plans to sell the port operations, or move them.

The reasons for the bid were to allow for the long-term development of the waterfront land, and to provide a blue chip investment to fund infrastructure, he said.

The 90 per cent milestone has been a long time coming. ARH first made its bid on April 1, and was forced to extend it three times.