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The Canadian Pension Plan Investment Board formally launched a NZ$1.8 billion (US$1.4 billion) bid for a stake in New Zealand's Auckland International Airport on Friday, prompting the airport to seek rival offers.
The all-cash offer, through subsidiary NZ Airport, for a stake of up to 40 percent was unveiled last week, and is the Canadian fund's second attempt after the airport board rejected an initial approach last month.
"This offer is highly attractive for shareholders when compared to AIAL's past trading prices, transaction and trading multiples and analyst valuations," said CPPIB senior vice president Mark Wiseman.
The offer is NZ$3.6555 a share, and values the whole of Auckland International Airport at around NZ$4.5 billion.
Shares in Auckland Airport last traded up two cents or 0.7 percent at NZ$3.06.
CPPIB said last week it had been lobbied by some of Auckland Airport's biggest shareholders to make a formal bid after the board rejected its first proposal.
On Oct. 31, the Auckland Airport board ended talks with CPPIB, saying its cash and securities proposal to take a stake of up to 49 percent was too risky as it would triple the company's debt.
Auckland Airport is New Zealand's main international gateway, handling more than 70 percent of arrivals and departures.
The three largest shareholders are Auckland and Manukau City Councils and utilities investor Infratil.
The two councils, which hold nearly 23 percent between them, have said they intend to hold onto their stakes, although Auckland City Council said the Canadian proposal seemed to offer significant value for shareholders.
The CPPIB said if it attained its 40 percent stake it would put up a proposal to restructure the airport balance sheet through shares and convertible debt notes, which would allow higher payouts to shareholders.
The board of Auckland Airport repeated its "don't sell" advice and said now there was a formal bid it had asked First NZ Capital and Credit Suisse to actively seek other offers.
"While we have had discussions involving more than 10 parties over the past 18 months, covering a range of local and international entities, these discussions were largely on the basis of a restructuring rather than a takeover," said Chairman John Maasland in a statement.
In September, a bid from Dubai Aerospace Enterprise for a 51-60 percent stake in the airport foundered amid accusations the airport company had not done enough to promote the deal.
The sale of the airport is politically sensitive. Opponents argue it could lead to foreign control of a strategic asset, and also raise concerns about the structure of potential deals.
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