Auckland Airport Enters Buyout Talks Canada Pension Fund Offers $2.8 Billion BUSINESS ASIA By Bloomberg

By Emma O’Brien

Auckland Airport, New Zealand’s busiest, said Monday that it was in talks with the Canada Pension Plan Investment Board and other parties, after the fund made an offer valuing the company at 3.79 billion New Zealand dollars. The offer is equivalent to $2.86 billion. The investment fund offered some shareholders in the airport 3.10 dollars a share for their holdings, Auckland Airport said, 8 percent more than the closing share price Friday. The stock surged to a record 3.30 dollars on speculation that another bidder might emerge after the airport said it was in talks about “value enhancing” opportunities.

Bidders may include Macquarie Airports, Australia’s biggest owner of airfields. Auckland Airport is adding shopping malls to its terminals in anticipation of a pick-up in visitor arrivals, which have been hurt by the strong New Zealand dollar.

“They’ve got a very attractive asset of the type that doesn’t come up very often globally,” said Shane Solly, portfolio manager at Mint Asset Management in Auckland, which owns the stock. The company is saying to shareholders that it “may not have to be taken over for value to be realized,” he said.

Shares of the airport, based in New Zealand’s fastest-growing city, have gained 25 percent since the beginning of May, when The New Zealand Herald reported that Macquarie Bank, the world’s largest private manager of infrastructure assets like airports and toll roads, was trying to build a 10 percent stake. Macquarie Bank manages Macquarie Airports.

Calls to a Canada Pension Plan spokeswoman, May Chong, were not returned. The fund is worth 116.6 billion Canadian dollars, or $109 billion, and will begin paying pensions starting in 2022, it said.

Canada Pension invests in more than 2,600 companies and owns shares in New Zealand companies including Air New Zealand, Contact Energy, the biggest publicly traded utility, and Fletcher Building, the biggest construction firm, according to the Web site.

A Macquarie Airports spokeswoman, Karen Halbert, declined to comment on whether her company was in talks to buy a stake in the New Zealand airfield.

Macquarie, which owns the Kingsford Smith International Airport in Sydney, would “definitely” be looking at bidding for Auckland, said Luke MacNab, an analyst at ABN Amro Australia in Sydney.

“It’s a small version of Sydney, in a way, in that it’s the dominant international airport,” he said. “Price will obviously be a major factor and what they can bring in terms of value-add.”

Auckland Airport said investors should not sell their shares yet.

“Doing so would risk forgoing the value upside” of the shares, the company said. Talks with interested parties including Canada Pension may result in an offer for a stake in the company and support for its strategic development, it said.

Auckland City Council, the largest shareholder, owns 12.75 percent of the airport, and Manukau City Council owns 9.55 percent. Any potential bidder would find it “difficult” to negotiate with the councils, Solly at Mint Asset Management said.

(c) 2007 International Herald Tribune. Provided by ProQuest Information and Learning. All rights Reserved.