The Dubai Aerospace Investment(DAE) bid,in its current form, for Auckland International Airport (AIA) has inevitably fallen over but one of the many bidders waiting in the wings has finally shown its hand.
The Canada Pension Plan Investment Board wants to buy 49 per cent of Auckland International Airport(AIA) through a proposal that would see the Auckland and Manukau City Councils maintain their combined 22 per cent stakes.
The Canadians said this morning they had largely completed due diligence on the airport and were now considering their options ahead of a formal proposal to airport shareholders.
The group, said it was committed to two main points. These were limiting its share to 49 per cent and allowing the two city councils to maintain their existing shareholdings.
Any proposal would involve the issue of new shares.
Nothing so far in the whole AIA merger/takeover saga has been simple. Complication seems to be the order of the day and the Canadian offer looks to be following this trend.
The 49% limit to the Canadian bid to get around local council politics with the combo of the issuing of new shares means a dilution in ownership for those shareholders who choose not to sell.
As I have said before, I dont mind selling my shares to an overseas concern, as long as the price is right or I am not going to be disadvantaged in any way.
I wasn't ready to sell to DAE for obvious political and security reasons but I'm willing to make an exception for those wealthy Canadians because if I stay a shareholder in such a complicated shareholding structure I am likely to be subject to political maneuvering and all that entails.
The deal between The Canadian Pension Plan and AIA is by no means a foregone conclusion, because there are individuals in local councils and National politics who are dead against selling to any foreign buyer. It maybe wise for those short-term shareholders who think that this or any other deal may not succeed, to offload their shareholdings at any material increase in share price due to a concrete offer.
If of course if the structure of the company stays as it presently is, if no deal will succeed because of political pressure, then I will be happy to remain a shareholder.
c Share Investor 2007