New Zealand's Auckland International Airport said on Monday it backed an offer of up to NZ$2.6 billion (US$2.08 billion) from Dubai Aerospace Enterprise to buy a controlling stake of between 51% and 60%.
Under the offer, which values the whole of Auckland Airport at NZ$5.6 billion ($4.5 billion), a new company will be created. Auckland Airport shareholders will be offered NZ$2.34 in cash per share, a new stapled security in Auckland Airport and a special dividend of 7 cents per share.
The offer gives an equivalent value of NZ$3.80 a share.
Shares in Auckland Airport, one of New Zealand's top ten companies, gained 4.2% at the market open to NZ$3.45 having traded between NZ$1.91 and NZ$3.35 over the past year. Auckland Airport Chairman John Maasland said DAE would help Auckland Airport to pursue new opportunities beyond the existing airport site.
"We believe DAE will bring additional aviation and tourism development experience to the New Zealand business," Maasland said in a statement. The company will continue to be listed on the New Zealand and Australian stock exchanges.
The offer is conditional on 75% shareholder approval and will be voted on in November.
DAE is an aerospace manufacturing and services company, and chief executive Bob Johnson said Auckland Airport would be a cornerstone investment. Maasland said the board has supported the proposal in the absence of a better offer.
Auckland Airport has been the subject of takeover speculation since May. On June 18, it said it was in stake sale talks, after several shareholders in the firm rejected a NZ$3.10 a share approach from the Canada Pension Plan Investment Board (CPPIB). That offer pushed its shares up as much as 17%.
Auckland Airport is about 23% owned by two local bodies, both of whom have said they are long term shareholders in the company, but not ruled out considering any offer.
The airport handles about 70% of New Zealand's international traffic. After the offer was made public it issued a revised profit forecast of between NZ$91 million to NZ$92 million compared with a previous forecast of NZ$103 million for the year to June.
It is halfway through a four-year NZ$500 million capital expenditure program, including upgrades to its domestic and international terminals and the runway.