State Services Minister David Parker and Associate Finance Minister Clayton Cosgrove have vetoed the sale of Auckland International Airport [AIA.NZ]
After over a year of negotiations by two prospective parties, The Canadian Pension Plan Investment Board and Dubai Aeronautical Enterprise, all the time money and expertise that has gone into brokering a deal has been reduced to an international farce by the stroke of a socialist government pen.
The intervention has come at a time when markets are shaky and the economy is on a downturn and this added uncertainty has disappointed the market again and the 50000 odd voting age Mums and Dads who voted overwhelmingly in March to allow the CPPIB to buy their shares.
It is not hard to imagine what the CPPIB next move might be, but they have 3 options. Walk away completely, walk away while making a financial claim against the New Zealand Government, for their costs involved in axing a deal by retrospectively changing an overseas investment law, or push on in the courts to allow them to seal the deal.
The Auckland Airport would also have a claim for the millions of dollars of costs incurred for its shareholders because of the retrospective law.
Disclosure: I own AIA shares
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