CANADA - The CAN$108.9bn (US$86.8bn) Canada Pension Plan Investment Board (CPPIB) has made a formal offer to acquire the Macquarie Communications Infrastructure Group (MCG) in a deal worth C$1.16bn (US$0.92bn).
This represents a 67% premium over the last closing price of the company's stapled securities, and a 134% premium over the three month average trading price. It values the company, including proportionately consolidated debt, at A$7.32bn.
CPPIB senior vice president for private investments Mark Wiseman said: "This transaction enables us to acquire a diversified portfolio of high-quality infrastructure assets with stable cash flows at an attractive valuation.
"Current economic conditions provide a unique set of opportunities for investors with liquidity and a long investment horizon like the CPP Investment Board. We will be disciplined as we continue to evaluate a number of new investment opportunities that can potentially deliver excellent long-term, risk-weighted returns to the CPP fund."
MCG has three primary assets in the UK and Australia. These are an approximately 48% per cent stake in Arqiva, a UK broadcast transmission provider and communication infrastructure; a 50% stake in Airwave, a secure network access and communication provider to UK emergency and public safety businesses; and 100% of Broadcast Australia, an Australian broadcast transmission provider.
The announcement comes just days after the CPPIB announced plans to issue up to CAN$5bn (US$4.04bn) in debt over the next two years to help it fund investments in illiquid assets (Globalpensions.com; 27 March).
The CPPIB said it had chosen to enter debt markets in order to "create additional flexibility" in the timing and raising of funds, as current market conditions had created opportunities to acquire assets with "attractive risk adjusted returns".
Issuing debt, the CPPIB said, was one of the most advantageous ways of doing so and had been employed by its Canadian peers, the C$52bn Ontario Municipal Employees' Retirement System (OMERS) and the C$108bn Ontario Teachers' Pension Plan (OTPP).
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