Canada Pension Fund to Bid for Auckland Airport Stake

Canada's state pension fund said on Wednesday it would make an all-cash offer for a stake of up to 40 percent in NZ's Auckland International Airport, a week after the company rejected a previous offer.

The Canada Pension Plan Investment Board said it would offer NZ$3.6555 a share, valuing the company at around NZ$4.5 billion (US$3.5 billion).

"In the past few days, we have received strong encouragement from Auckland Airport shareholders that they would like the opportunity to consider our proposal directly," CPPIB senior vice president private investments Mark Wiseman said in a statement.

On Oct. 31 the Auckland Airport board ended talks with CPPIB, saying the cash and securities proposal to take a stake of up to 40 percent was too risky because it would have tripled the company's debt.

Shares in Auckland Airport, 23 percent owned by two local authorities, closed on Tuesday at NZ$2.91, having traded between NZ$2.06 and NZ$3.50 over the past 12 months. The company's stock fell 8.1 percent to a four-month low after the board pulled out of talks last week.

Airport assets globally have been drawing investors because of their stable, long-term revenue streams, fueled by a boom in air travel.

Auckland Airport is New Zealand's main international gateway, handling more than 70 percent of the country's arrivals and departures.

CPPIB said if it was successful in taking a 40 percent stake in Auckland Airport, it would put forward its previous proposal to place the airport in a new holding company.

In early September, a bid from Dubai Aerospace Enterprise for a 51-60 percent stake in the airport was scrapped amid accusations the airport company had not done enough to promote the deal after it ran into opposition from politicians, the public and minority shareholders.

CPPIB said it would present a formal bid to Auckland Airport as soon as possible.