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Public money has been used in a surprise purchase of Auckland Airport shares, with potential to block a $2.6 billion takeover bid from overseas.
Although the Government denies exerting any influence on the purchase, made by investment managers on behalf of the New Zealand Superannuation Fund, financial analysts say the move could put a squeeze on Dubai Aerospace Enterprise's bid to buy at least 51 per cent of the airport.
The super fund and New Zealand-controlled infrastructure company Infratil emerged yesterday as owners of 6.2 per cent of the airport - a stake which could prove pivotal if combined with community shares of 22.8 per cent held by the Auckland and Manukau City Councils.
That is because those shareholdings could be used to prevent Dubai from gaining the support it needs from 75 per cent of shareholders.
Infratil has not only accumulated 2.14 per cent of shares in its own right, its management company Morrison and Co has also bought 2.87 per cent for the super fund, exceeding a 5 per cent threshold at which a disclosure had to be made to the stock exchange.
The exchange has also been advised that the fund holds a further 1.19 per cent of the airport independently of Infratil.
Although Dubai Aerospace is not admitting concern, Infratil chief executive Lloyd Morrison said his team had begun discussions with the city councils about an alliance.
"Obviously there is a good chance we will have common interests and common views about the airport with Auckland City and Manukau and will work quite hard to understand further what their objectives are. We have spoken a lot with both councils already, and we do already have some common views."
He denied it was his company's intention to form a united front to block Dubai.
The Superannuation Fund refused any comment, referring inquiries to Morrison and Co, but a spokesman for Finance Minister Dr Michael Cullen said the Government had nothing to do with the latest development.
"The super fund invests at arm's length from the Government - the Government does not influence its investment decisions. It has a mandate to make a commercial return and not prejudice the reputation of New Zealand."
But the move follows a comment by Trade Minister Phil Goff two weeks ago that the Government supported the majority view of Aucklanders wanting their airport shares kept in public ownership.
Macquarie Equities investment director Arthur Lim sees the super fund-Infratil shareholding as undoubtedly a blocking stake. Even on the slim chance that the Auckland and Manukau councils eventually agreed to Dubai's offer, he said, Infratil's position effectively meant the bid "will have to be substantially revised if they intend to pursue it any further".
On the other hand, he suggested that Dubai could have a healthy chance of success for a revised bid led by Infratil, which could "fly the patriotic flag" and sidestep some of the more "xenophobic" opposition.
"From a political standpoint, an Infratil-led consortium is a much easier proposition to take to the market."
Infratil owns majority stakes in Wellington Airport and several European airports, and has a strong interest in establishing a second civilian airport at Whenuapai.
Mr Lim also noted Infratil's history of partnerships with large overseas investors to buy and manage local infrastructure assets such as TrustPower and Ports of Tauranga.
"With Auckland Airport, I suspect that's what they will be trying to achieve."
Mr Morrison denied any link between Infratil's proposal for Whenuapai and his move on Auckland Airport, which he said began last year in appreciation of its growth potential.
He had an "open mind" on Dubai's proposal, but expected to be involved in considerably more discussion over the airport's optimal ownership and control structure, in which Infratil believed there was a strong case for New Zealand investment.
"If the price is right to buy some more shares, we may well do that."
Dubai's airports division chief executive, Kjeld Binger, said he was neither surprised nor concerned.
