The board of Auckland International Airport Limited (AIAL) is recommending its shareholders reject a partial takeover offer from the Canada Pension Plan Investment Board (CPPIB).
“We do not believe the offer fully reflects the value of Auckland Airport,” says the company’s chairman, Tony Frankham. “Nor do we not believe the introduction of CPPIB as a cornerstone shareholder would assist the company in any material manner.”
He adds that the board is optimistic about the value of the airport, particularly the way in which it is positioned to benefit from growth in aviation in that part of the world.
“While CPPIB would be a committed investor, the board is concerned that they bring little in the way of direct airport experience and, as a passive investment fund, have limited scope to directly contribute to Auckland Airport’s growth strategy beyond its current business plan,” says Frankham.
“The board has serious doubts about whether the amalgamation proposal outlined by the Canadians can succeed, and was previously concerned by the high debt levels of that proposal.”
A New Zealand-based independent advisory firm, Grant Samuel, has concluded that AIAL is worth between NZ$3.07 and NZ$3.48 a share, which is below the CPPIB’s offer of NZ$3.6555 per share.
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“We strongly believe it is an attractive and fair offer, and encourage shareholders to accept and approve the offer,” says Mark Wiseman, CPPIB’s senior vice-president – private investments.
On Friday, the board mailed its partial takeover offer—which will remain open until March 13, 2008—to shareholders.
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