Shareholders in Auckland International Airport should both approve and accept the partial takeover from Canada Pension Plan Investment Board, Forsyth Barr broker Ken Lister says.
‘‘Those investors that do not want to approve should still accept, as this gives them the option to sell, should the offer succeed.
‘‘Our view is that the offer needs considerable retail support to be successful without at least one of the major shareholders surprising by approving or abstaining from voting,'' he told the Otago Daily Times.
The airport company yesterday announced a 3.9% fall in reported first-half profit, which was hurt by a $5.8 million one-off cost booked in relation to assessing the Dubai Aerospace and CPP proposals.
Earnings before interest, tax, depreciation and amortisation (ebitda) rose 7.3% to $135.4 million in the six months to December while the after-tax profit fell to $47.6 million.
An improved dividend of 5.75c a share was declared. The increase in dividend was to utilise surplus imputation credits that would be lost if the CPP offer was successful.
Sales were up nearly 8% to $172.3 million. AIA said that despite speculation, no decision had been made on revising its recommendation that shareholders reject a partial offer from CPP.
It was expected the final dividend would be reduced by 2c, reflecting the increased interim dividend paid to shareholders now.
CPP said it had consented to the 5.75c interim dividend, waiving a clause of its partial takeover offer to enable the dividend to be paid.
In accordance with the offer, the amount paid under the takeover offer for each AIA share would be reduced by 5.75c to $3.598 to reflect the dividend and the resultant decrease in AIA's equity value.
AIA said solid growth was achieved during the half-year in revenue and operating earnings before interest, tax and depreciation.
It also made significant progress on a range of key business development projects, including completing a renovation of the domestic terminal, development of the international terminal and the start of the first stage of the northern runway.
AIA chairman Tony Frankham said growth was achieved across all major revenue lines, with retail, car parking and rental income achieving double digit growth.
But the company also had increased operating expenses and, as expected, there was also an increase in depreciation and interest costs directly associated with the company's investment programme, combined with higher interest rates.
In the short term, the impact of the global macro-economic environment combined with a slowing in the domestic economy reduced the expected level of passenger growth for the remainder of this year, he said.
While domestic passenger numbers were growing strongly there were signs international passenger growth was levelling off, with a higher New Zealand currency and higher oil prices being important factors.
In the longer term, directors remained positive about growth prospects. ‘‘The company is ideally placed to benefit from the expected significant growth in traffic, particularly in the Asia-Pacific region, over the medium term,' he said.
Mr Lister said that given weaker market conditions, CPP's persistence and no other likely alternative offers on the table, the chances of CPP being successful had increased.
If shareholders did not want to approve the offer, they should still accept. If the offer was successful, they could sell some of their shares at $3.6555 and buy back later at lower price, if they wanted.
Forsyth Barr had a valuation on AIA of $2.63 a share, about where the shares were trading yesterday.
