In a surprise move yesterday, the Canada Pension Plan Investment Board (CPP) - making a 40% partial takeover offer for Auckland International Airport (AIA) - set aside an equally surprising move by the Government the previous day to effectively block the offer.
Before CPP's announcement yesterday, AIA shares were trading down more than 10% after opening at $2.74 to $2.49, on robust volumes of six million shares on investor expectations the takeover was scuppered.
After the CPP announcement, the price continued to fall and closed down 13.7%, or 39c, at $2.44, on turnover of 9.8 million shares valued at $24.6m.
The Government's's intervention, which would have been retrospective, would block a multimillion-dollar tax break sweetener offered by CPP, where stapled securities allowed payment of tax deductible interest to investors, instead of dividends.
However, CPP said in a statement yesterday that ‘‘notwithstanding'' the Government's announcement to amend tax laws covering stapled securities, it would continue with its partial takeover offer.
‘‘The partial takeover offer does not involve the issue of stapled securities. They were only to be issued under the proposed amalgamation, which would be considered by AIA's board and shareholders in due course, after the completion of the partial takeover,'' CPP said in a statement yesterday.
There has been strong resistance to recent takeover offers for AIA, being the primary tourism gateway to New Zealand, having strong growth potential and also sitting on a large land bank.
ABN Amro Craigs broker Peter McIntyre said that although the CPP bid would still go ahead, any 40% stake would require majority shareholder approval and he doubted there was any likelihood of CPP succeeding.
He said not only did the Government not want to see significant dividends from AIA going overseas, but other major shareholders such as the Auckland City Council (13%), Manukau City (10%), ACC and NZ Super Fund were unlikely to support the CPP bid.
- AIA was yesterday listed third in the top five airports in the world carrying between 5m-15m passengers annually for customer satisfaction. More than 100 airports took part in the survey, with Nagoya in Japan, Tel Aviv in Israel, Auckland, Christchurch and Adelaide the top five.
