NEW ZEALAND - The board of Auckland International Airport (AIA) has urged shareholders to reject a partial takeover offer from the Canadian Pension Plan Investment Board (CPIBB).
The latest offer for 40% of AIA would see investors paid NZ$3.66 (US$2.85) a share, comprising a convertible note valued at NZ$2.75, 20 cents in cash and a share worth 70.55 cents in a new holding company for each airport stock held.
But chairman of the board Tony Frankham said its directors said they did not believe the offer fully reflected the value of Auckland Airport.
He said: "While the takeover 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 takeover.
"If the offer succeeds, acceptances will most likely be scaled. As a result the overall value of accepting the offer will be less than $3.6555 per share."
Frankham said the board was optimistic about the value of Auckland Airport, which was positioned to benefit from growth in aviation in the region.
"We have commissioned a report, sent to shareholders with the Target Company Statement, which demonstrates the potential growth in the Australasian aviation sector," he said. "The board expects Auckland Airport to benefit from that growth.
"As we have previously indicated, we see benefit in establishing a synergistic relationship with a partner who would bring additional airport expertise or tourism opportunities to complement our existing excellent management team. We anticipate this partner would have global connections and relationships to further enhance the business of Auckland Airport.
"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."
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