The board of Auckland International Airport recommended Monday that shareholders reject a partial take-over bid for New Zealand's air transport hub by a Canadian pension fund. "We do not believe the offer fully reflects the value of Auckland Airport," chairman Tony Frankham said.
Canadian Pension Plan Investment Board (CPPIB) has offered 3.6555 dollars a share for 39.53 percent of the airport, which handles 70 percent of international arrivals to New Zealand. Frankham said in a statement that the pension fund would not offer any material advantage to the airport, which would be valued under the partial bid at 4.46 billion dollars (3.4 billion US).
"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.
"While the take-over offer has some attractive aspects, on balance, the partial nature of the offer gives shareholders no certainty on the total value they will receive from the take-over," he said. An independent adviser report by Grant Samuel said the Canadian fund's offer was above its valuation range of 3.07 dollars to 3.48 dollars a share.
But the board said it believed there were more growth opportunities and the potential to increase value. If the bid by CPPIB fails, the airport board plans to search for another international cornerstone investor which could add airport expertise or tourism opportunities. CPPIB's head of infrastructure investment in Toronto, Graeme Bevans, said he was not surprised by the board's recommendation against the latest offer.
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