Shares in New Zealand's Auckland International Airport fell sharply in the morning trading session Monday after a senior minister was reported as saying the government was opposed to a takeover offer for the airport by Dubai Aerospace Enterprise.
The New Zealand Herald newspaper quoted trade minister Phil Goff as saying the government was opposed to the deal, which is subject to government approval.
However, Goff later said the newspaper had confused the issue. He said the government supported two local bodies not selling into the deal, and the issue of government approval was a separate one and would be decided in due course.
"The government ministers responsible don't pre-empt their decision in that regard, they will follow the criteria set out, they will follow the statutory process and if it gets that far will make a decision in due course," Goff told Radio New Zealand. Auckland International Airport shares last traded down 23 cents or 7% at NZ$3.05, a seven-week low.
State-backed Dubai Aerospace Enterprise has offered to pay up to NZ$2.6 billion (US$2 billion) for a controlling stake in Auckland Airport, the country's main international gateway. The airport's board has backed the offer.
Auckland City Council owns 12.8% of the shares in Auckland International Airport, while Manukau City Council owns 10%.
Neither council has stated its position on the deal, but local polls show the majority of Aucklanders oppose the deal. The deal needs the backing of 75% of shareholders, and will be voted on in November.
Goff said the government's position was that it would not sell any shareholding it had in key public utilities.
The leader of the New Zealand First Party, Winston Peters, who is also foreign minister, has also voiced strong opposition to any sale.
Under a deal giving the Labor-led coalition support on finance and confidence issues, Peters represents the government on foreign affairs, but is free to express different opinions on other policy matters.
The offer by DAE, which is for a stake of between 51% to 60%, is equivalent to NZ$3.80 a share. It consists of NZ$2.34 in cash and a share in the new airport company with a loan note attached, and a 7 cents per share special dividend.
Dubai has run into political hurdles with other deals. Last year, Dubai Ports World was forced to sell U.S. port assets it bought as part of a takeover of Britain's P&O after U.S. lawmakers said they had security concerns about the Arab state-owned company operating key infrastructure.