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NZ's Auckland Airport Says Takeover Plan Altered

By Insert Byline
Wednesday, 5 Dec 2007 | 10:50 PM ET

New Zealand's Auckland International Airport said on Thursday the Canada Pension Plan Investment Board (CPPIB) had proposed changes to a part of its NZ$1.8 billion (US$1.4 billion) partial takeover plan.

CPPIB is looking to buy 40 percent of Auckland Airport, New Zealand's main international gateway and, if successful, plans to put to a shareholder vote a capital restructuring plan that replaces the airport's existing shares.

The airport operator said on Thursday that CPPIB had changed the capital restructuring plan, reducing the number of convertible notes it will offer by 18 percent to NZ$3.4 billion and increasing the number of ordinary shares sixfold to NZ$862 million.

Auckland Airport said in a statement all other terms of the proposed deal remained the same. No reasons for the change were given.

The CPPIB, a state pension fund, has offered NZ$3.6555 a share in cash for the 40 percent stake. Its approach has prompted the airport's board to seek alternative bids.

Shares in Auckland Airport, a top-10 company, last traded up 2 cents at NZ$2.81, after trading between NZ$2.12 and NZ$3.5 over the past 12 months. Analysts have widely tipped the CPPIB bid to fail, saying its plan poses a big risk for the company because it involves tripling debt to NZ$2.6 billion.

Auckland Airport carries more than 70 percent of New Zealand's international traffic, and has recently seen its chairman resign and three new board members appointed, after shareholder discontent over how the company has handled recent takeover approaches.

In September state-backed Dubai Aerospace Enterprise withdrew a bid for a 51-60 percent stake at the equivalent of NZ$3.80 a share, saying the board had not done enough to promote the deal.

The airport's sale is politically sensitive, with opponents arguing it would lead to foreign control of a strategic asset.

About 30 percent of Auckland Airport's shares are owned by two local city councils. The two, along with other shareholders New Zealand's state pension fund and utilities investor Infratil, have all indicated they are not keen to sell.

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