Sacha Cobern's column a slap in the face for Deborah Morris-Travers

Sacha Cobern has this week sparked debate from those sensible people with commonsense, who believe smacking a child should be a valuable tool in a parents toolbox and that government have no business putting their sticky beak noses in our business. The fear that parents now have over the anti smacking law, has already led to many parents labeled as abusers for lightly smacking their kids and has undermined the authority of good parents all around the country.

I am aware myself of two cases of children telling on their parents and these two accounts haven't hit the media like others have, probably because parents want to keep things secret for fear of being labeled abusers by do gooder socialists. There are bound to be more of these undisclosed cases.

Sacha's piece has sparked a violent, incoherent, high minded and intellectually offensive outburst by a former minister of Parliament, Debra Morris-Travers, an employee of the State backed Barnardos, a former advocate for children but now an extension of the Labour Party propaganda machine.

"If anything, that side of the debate has been too earnest and intellectually-based and that's why so few people seem to understand what has driven the law change.

The media's refusal to give coverage to the evidence and research supporting the law change is the only reasonable argument for a lack of intellectual rigour in the debate".

Morris-Travers contends that she practices what she calls "positive parenting" so by exclusion labels parents who smack negative and clearly criminal for "assaulting" their children by lightly smacking them.

In another poke at the average Kiwi she labels them as too stupid to understand the "intellectual debate" over the repeal of section 59, when it is clearly very simple, parents need to be able to correct their children's behaviour with every reasonable tool possible. Nothing complicated about that.

Like Helen Clark she blames the media for it not revealing the facts supporting her case. The reason none have been forthcoming is that those "facts" do not exist.

Read both and then decide for yourself who is talking garbage and deserves a smack on the behind.


c Political Animal 2008

Sacha Coburn: Smack on the hand worth time in jail

5:00AM Tuesday February 26, 2008, NZ Herald
By Sacha Coburn

The Smacking Debate

• Deborah Morris-Travers: Lead by example, not with violence
• Garth George: Full up and fit to burst on a gutsful of Govt ideology

I agree with Bob McCoskrie and Larry Baldock. Eight words which churn my stomach as I write them. When left-leaning, social liberals like me are forced to align with the fundies speaking in tongues and organising petitions, you know our little country at the bottom of the world has gone mad.

I want to smack my daughter. At least twice today I'm likely to threaten it and may even make meaningful preparations to carry it out. Send her to her room. Get the wooden spoon out of the drawer. Enough to be arrested for an attempted smack, I'd have thought. Is it wrong to fantasise about a night in the lock-up?

"You mean that in solitary I'd be by myself for 23 hours in a row?"

Smacking my son was a parenting strategy of last resort and was immediately effective when dealing with defiance and dangerous situations. I've never smacked in anger and never without issuing a final warning first. I'm a text-book smacker. Pin-up girl has a certain ring to it.

But now, with my precious Portia, aged 2 years 8 months, my tool box is looking a little empty.

"No," she says. "I won't put my seat belt back on." Try reasoning, Aunty Sue B suggests. "If we crash, you'll get hurt."

"No, I didn't."

Try praising the good behaviour, says Aunty Cindy K.

"Mummy loves it when you wear your seatbelt."

"No! I love Daddy!"

Wait out the bad behaviour, advises Aunty Dianne L.

Good idea until my phone rings: "Hello Sacha, are you coming to get your son from school today? It's 5.30pm and the cleaners are going home."

"Not yet," I reply. "Just wearing Portia down, should be there by midnight."

Scare her, suggests my guardian demon.

"If you don't put it back on, tonight I'll close your bedroom door and leave the light off." Cue screaming, but still no seat belt. What kind of parental monster uses fear of the dark as a legitimate tool?

The problem for me is that I love the law and the democratic process. As a lawyer, I understand the benefits of obeying the law and the potential consequences of disregarding it. I want to parent within the law and I want to be able to use smacking as one of many parenting tools.

I'm a bloody good parent; well-read, patient, on the Board of Trustees even. I know that clothes driers are for clothes only and that I shouldn't leave my child with the man next door who's on bail awaiting trial for manslaughter. I understand the food pyramid and surely I get brownie points with the Greens for breastfeeding both babies past 12 months.

I don't believe smacking is for every parent or every child. I don't believe that it's an effective tool once children get beyond four or five. I wouldn't insist that you smack your child, but I don't believe Parliament fixes anything by taking away my right to smack mine.

Sue Bradford told us that we had to stop treating our children as property. They are people too, with their own minds and their own rights. Illuminating stuff. But the police officer who pulled me over and asked why my child was wandering willy-nilly around the backseat didn't buy it. I am apparently totally responsible for her well-being and behaviour, but not to be trusted when it comes to making parenting decisions about how to develop her sense of right and wrong.

Perhaps the most frustrating aspect of the whole smacking debate is the lack of intellectual rigour evident on both sides of the issue. To continue the rhetoric about child abuse and smacking having any casual link is absurd - as all of us who were smacked-not-beaten as children can attest. And to suggest on the other hand that God gave us the right to smack is equally offensive - he also okayed some other pretty dodgy ideas.

The obvious victims remain. Children who are violently abused in their homes are no more protected than they were before the law change. But my own daughter is undoubtedly a victim too and our whole family suffers the consequences of her strong sense of self-above-all-else.

She has, in the past six months, learned that there are few sanctions I can impose on her that are meaningful enough to deter her from her intended course of action. She knows that if she screams loudly and for long enough she might not get her way but, by golly, there'll be a flurry of action around her. In short, she has learnt that behaving badly works.

How ironic if, in years to come, the lack of corrective smacking in childhood is raised in mitigation of criminal offending.

* Sacha Coburn is a Christchurch businesswoman, lawyer and mother.

Helengate: Retreat while you are behind

c Emmerson 2008



Related Reading

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Watch Video: Winston's outburst

New Zealand Herald Feature: Democracy under attack

Continuing with her media attack this week, the mother of the nation, Ms Clark drew on the similarities made by journalists, also by Political Animal, between the ousting of a Journo from Fiji this week and Clark's paranoid attack on the media and especially the NZ Herald this week.

She, however, didn't see the obvious similarities that the New Zealand public saw emphasised by this quote from the Prime Minister:

"Democracy of course involves elections but it also involves freedom of media and freedom of speech and you're not going to be able to have a proper democratic process and elections in a years time unless those basic freedoms are upheld."

Earlier on this week Clark's paranoia escalated to lithium sized proportions when she attacked the Herald for running an active campaign for the last 91 years to discredit Labour and that the papers revelations last year over the anti freedom and anti democratic Electoral Finance Act were motivated by greed and a lust to retain advertising on the Herald's part.

Clark of course forgets that the majority of the media also railed against her fascist bill and most sensible people will tell you that the Herald is far left of centre, mostly favours Labour and has done so for her 9 years in the big swiveling chair.

Her Husband, Peter Davis, has dropped his apron and rubber gloves to pen another opus to the NZ Herald over what he calls the papers "happy mischief and headlines" and their attacks on Labour, Owen Glenn, and his rather uniquely attractive wife.

"The Herald has had great fun at the expense of a wealthy donor and a political party.

Fair enough, perhaps, but does this incident not underline how perilous it is for our system of electoral financing to be so dependent - as it is - on (generally secretive) wealthy individuals and corporates?

Electoral financing in most well-ordered countries relies on a judicious mix of expenditure limits, state subsidies, individual contributions, and some transparent, larger donations.

Is it not about time the Herald did some even-handed reviews of the area, rather than just foment happy mischief and headlines?"

Dr Peter Davis, Kingsland

Now I'm not sure if Dr Davis has stopped taking his medication but he writes about "secretive, wealthy" people giving money to political parties but that is the very thing the subject of his letter is about. Glenn loaned $100,000.00 secretly to the Labour Party in 2005!

Now I'm not against individuals or corporates giving any amount of money to a political party, there should be no limits, as is the case in many civilised democratic countries, but I do agree with Davis that those donations should be made in a transperent way.

"some transparent, larger donations"

Davis is clearly referring to Owen Glenn's $500,000.00 donation to Labour for the funding of the 2005 election and it is also significant to the 2008 election because Labour added a specific clause into the Electoral Finanace Act to allow donations for expat individuals such as Glen, who live mostly overseas, to give to the party.


"Is it not about time the Herald did some even-handed reviews of the area"

Obviously Davis shares this view with his good wife and they seem simpatico on such matters.

What galls about New Zealand's first couple attacking the media and the Herald specifically, is that they are merely reporting what has transpired. It happened, get over it, move on, its getting bloody tired and quite frankly not a very statesman like way to behave.

Because you don't agree with it, it doesn't mean you should try and shut down debate by throwing your pitiful socialist labels around like a drunken teenager ejaculating on his bedsheets.

I'm embarrassed for her and her administration and look for more in a leader.

Labour's chief lap-dog Winston "Baubles" Peters also got into the act today. He abused media in a press conference that looked like something from "Yes Minister" crossed with "The Osbourns" and brought back distant memories of a drunken Rob Muldoon, Prime Minister back in the 1970s -80s.

Did Winston have a drink or two on the plane back from meeting with Condoleezza Rice in Korea or did he have a quick swig of duty free in the Airport toilets prior to going before the cameras?

Of course first class travel, five star hotels and late nights can be very stressful.

This attack on the media from the left just has to stop, not for their sake, because it is clearly comedy gold for the media, but for the sake of the Labour Party and its prospects for the coming election.

They should be worried.


Related Political Animal reading

Helen Shoots herself in both feet
Helen Clark's slipping Teflon leaves her naked
Labour's Teflon in Tatters
Clark's rudeness to Glenn plumbs new depths
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Electoral Finance Bill: The purpose is clear
Owen Glenn given the cold shoulder
Snouts in the trough bent out of shape
The Owen Glenn story: Singing the same tune but hitting a bum note
Victim of Electoral Finance Act forced to close website
Mike Moore turns knife on Electoral Finance Bill
Electoral Finance Bill: Day of Protest Auckland Nov 17, 2007

c Political Animal 2008

Hard times make Great Businesses

Efficiencies gained during economic downturns are good for business long-term. New Zealand businesses need to seize the opportunity now to focus on producing innovative, value added, niche products and services to increase export and business profit margins and stop using the current conditions to moan about their situation.

So the New Zealand dollar is at a post float 23 year high, exporters are hurting financially and moaning about it, petrol and energy costs are crippling, labour costs keep rising, mortgage rates are spiraling, Kiwis are leaving in record numbers and it is due to get much worse should Labour be returned to office come election time and time to back up promises of pre-election spending come home to roost.

There is little we can do about the current government imposed meltdown except push on and continue to try and do business.

I'm continually unimpressed with John Bongard from Fisher and Paykel Appliances, farmers and other exporters coming out in the media every time the dollar goes up another cent, John's energies and expertise would be well better focused on improving efficiencies at his factories-27 people have just got the push from his South Island factory- in whatever way he can.

His push into Thailand is a great idea and clearly his company would well benefit from moving more of the New Zealand enterprise there. Businesses change, as do circumstances, and we must change to fit as things move on.

I'm not sure what John hopes to achieve by moaning and bitching but the days of protectionism from the Government for his sort of business seem over and he cant fall back on his companies history of operating as the bully boy, protected, monopoly it once was.

The reason business owners start a business in the first place is to presumably gain some sort of independence and freedom from working for others. The corollary of that independence is the responsibility to take account for the business and the conditions in which it operates under.

Sure, it is tough when you can see profit walking out the door as the NZ dollar ticks up another cent but these tougher times are good for business in the long run. There is nothing like testing how good management really are when the shite hits the fan. It is hard times like these that really great companies are made. To shave off cost by doing something better or more efficiently or investing in new technology to advance the product you are making.

This cycle of business is important to the long term sustainability of a company. When the fat is trimmed and efficiencies gained the company can lay a foundation to move in a more positive way.

Clearly some companies have always been well managed and there is nary a scrap of fat to trim. When looking for such a company to invest in, try to avoid businesses with an oversupply of superfluous expensive middle management - a really good sign something isn't right in a company structure. One drowning in such an over supply is Restaurant Brands, the fast food operator.

New Zealand is a small market and we produce small volumes of everything we export and we have heard ad nauseum about kiwi business "finding their niche" and it is true that this is the way our economy can really push ahead.

Now is a great time to start. Margins for exporters and local producers and sellers are being squeezed tighter than Michael Cullen's nether regions when the words "tax cut" are used, so to focus on upping that margin makes prudent sense.

We can never compete internationally on a volume basis with our largely commodity based export industry, so we have to process, package and re manufacture our commodities to squeeze more dollars from foreign pockets.

Current conditions are pressing, on business and consumers. We can use these conditions though to finally look at actually doing what our "business leaders" and politicians have been rabbiting on about for years.

Working smarter and more efficiently isn't just a Labour party PC catchphrase, it is an important part of New Zealand's future. A future where we are smarter and more efficient and as a consequence wealthier and therefore healthier and happier.

Lets hope the John Bongards of our business world can be a little wiser, stop moaning and put their money where their mouth is instead of foaming at the mouth.

Lets be a little more proactive rather than reactive to business conditions.


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c Share Investor 2008

Goodman Fielder hit by high commodity prices

Goodman Fielder's profit, after abnormals, was down
by 26% in the half year to Dec 31 2008 due mostly to
high commodity prices, especially wheat.


Like every business in New Zealand, Goodman Fielder Ltd [GFF.NZ] last half year has been about managing business costs.

Key Indicators

* revenue of $1316.8 million, an increase of 8.3% over 2007
* Normalised net profit after tax was $108.7 million, up by 7.2% (excluding one-off factory
closing costs)
* Operating cash flow increased by 20.9% to $95.3 million
* Dairy revenues exceptionally strong

Full NZX GFF profit announcement

Commodity prices for the Australasian food giant have increased with monotonous regularity and have tested all important margins for the company.

This has been largely ameliorated by production efficiencies, absorbing some costs and as all us consumers are well aware, passing on raw ingredient prices to consumers.

Goodman will continue to focus on cost management as commodity prices are likely to continue to increase, at least in the short to medium term. The Australian drought has impacted wheat prices especially, my favourite Goodman bread Vogels now retailing above 4 bucks, and it isn't clear whether there will be any slow down in that staple any time soon. The drought and consumption by India and China have sent wheat prices to all time highs.

Sustained rain across the wheat belts in OZ recently may bring hope for the next crop however.

The test of future performance for Goodman Fielder will be managing retail price increases so as not to annoy consumers too much and hand market share to competitors.

Having said that, management should be careful not to fall into the trap of gaining market share at the expense of margins and therefore profit.

Management have given a measured indication of future performance and an out clause of increases in the aforementioned commodity prices for indicative profit:

The company confirms previous guidance that it expects to deliver NPAT (pre significant items) for the F08 financial year of around the same level as for the previous financial year, with a sensitivity of plus or minus 5% reflecting the extreme volatility of commodity costs.

Like Goodman Fielder, foreign food makers are
under pressure on two fronts. With record
commodity costs forcing them to raise prices,
consumers are opting for cheaper products
while critics insist that the industry is milking
the situation.


According to the Sydney Morning Herald, Goodman may be interested in the cheese,yogurt and milk maker, Dairy Farmers.

"Clearly Dairy Farmers is of strategic value to us,'' Chief Executive Officer Peter Margin said today on a conference call. "We might take a look".

The company would be a good fit with Goodman's dairy division.

Profit was also hit by factory closing costs, which took NPAT down to $88 million.

The share price recently hit an all-time low of NZ$1.78 due to general market volatility and fears from investors that commodity prices would hit profit hard. It listed 22 December 2005 for approx $2.10 and it has manged to claw its way back to $2.16 today on small volume.


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c Share Investor 2008

Helen shoots herself in both feet

"Democracy of course involves elections but it also involves freedom of media and freedom of speech and you're not going to be able to have a proper democratic process and elections in a years time unless those basic freedoms are upheld."

Helen Clark Feb 26, 2008, on ousting of journalist by Fiji Govt for critiquing them

c Tom Scott 2008 No Comment



Now, Aunt Helen has either completely lost track of the attacks by her this week on NZ journalists over things they wrote which she disagreed with, and clearly the passing of the anti freedom of speech Electoral Finance Act last year slipped her mind like a 175km an hour car trip through the streets of an unimportant small New Zealand town.


Related Political Animal reading

Helen Clark's slipping Teflon leaves her naked
Labour's Teflon in Tatters
Electoral Finance Bill: The purpose is clear

c Political Animal 2008

Labour Party tax move on Airport attack on property rights

Stand back because I'm gunna blow!!!




Michael Cullen's retrospective tax changes over the AIA sale
effectively removes shareholders property rights

Additional reading on this story - direct links to article

Stuff
NBR
Radio New Zealand
Bloomberg
Southland Times



The arrogance, the stupidity, lack of moral and legal right and communist sort of garbage Michael Cullen is up to by retrospectively changing tax law to grab even more of New Zealand citizens and Auckland International Airport(AIA) shareholders money from them is not surprising, because we saw it in 2006 when the Labour government changed law in hindsight to make the theft of taxpayer money by them legal.

What is surprising is that Cullen and his mates around the cabinet table haven figured out or don't care about( I suspect they just couldn't give a hoot) the repercussions of their move: for business as a whole in the future, individuals and specifically the 50000 odd New Zealanders with shares in the airport-especially in an election year! Its just mind boggling.

We all know Cullen and his socialist mates hate private property rights and clearly business because here he is again stomping his little legislative pen and clipboard all over these rights.

That is, people have a property right in the shares they own in the airport and they have a right to sell them to whomever they wish, under the current tax laws which exist. Retrospectively changing the tax laws just because you can isn't a sensible way to oversee business because business needs to be able to function with surety of the current laws in which they trade under. They no longer have that in this respect.

By becoming involved in a transaction between its private citizens in this way the Labour Party have effectively wasted the time of all the parties involved. CPPIB , Auckland Airport and the shareholders involved.

Millions of dollars have also been flushed down the bog, because it costs to do these large deals. In this case it has cost shareholders like me money. Lots of it.

The interfering has wiped hundreds of millions from the capital value of the airport- down 13.5% or 38c to NZ$2.45- and therefore shareholders wealth and given notice to other overseas companies thinking about buying businesses in New Zealand to think again-if the government doesn't want it sold they will simply regulate in some way to stop it. It isn't your business anymore if you don't have the ultimate say about what happens to it.

Now investors know that Cullen and his minor party supporters have been against this sale from the beginning, almost 1 year ago. Winston "baubles" Peters has spoken about this many times and so has Cullen, Both early in the sale saga.

My question to Cullen is then, if you were against this sale from the beginning then why didn't you move to stop it at its inception? He certainly knew about the "tax issues" with the airport amalgamation but chose to sit on this harebrained half arsed intention till the very last minute.

He has also been aware that the announcement made today would have been consequential to the sharemarket value of AIA and has kept it secret from the NZX, CEO Mark Weldon's office and therefore the shareholders invested in AIA, and so should have informed the market alot sooner and alot less clumsier than he has.

I wonder if Weldon will be giving the minister a "please explain" letter? Doubt it.

The Canadian Pension Plan Investment board say they will "push on" with the deal and were aware of IRD approval when making their bid. I'm sure they didn't factor in todays turbulence though.

Finally, pissing off 50000 mums and dads when you have been nuked in the polls, your leader is melting down, and in an election year just isn't very bright.


Related Share Investor reading

NZ Herald: Airport Deal not so sweet after tax break blocked
NZX Press Release: AIA directors recommend shareholders sell
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares

c Share Investor & Political Animal 2008

Cullen's move on Auckland Airport Tax plan anti-business

Stand back because I'm gunna blow!!!




Michael Cullen's retrospective tax changes over the AIA sale
effectively removes shareholders property rights

Additional reading on this story - direct links to article

Stuff
NBR
Radio New Zealand
Bloomberg
Southland Times



The arrogance, the stupidity, lack of moral and legal right and communist sort of garbage Michael Cullen is up to by retrospectively changing tax law to grab even more of New Zealand citizens and Auckland International Airport(AIA) shareholders money from them is not surprising, because we saw it in 2006 when the Labour government changed law in hindsight to make the theft of taxpayer money by them legal.

What is surprising is that Cullen and his mates around the cabinet table haven figured out or don't care about( I suspect they just couldn't give a hoot) the repercussions of their move: for business as a whole in the future, individuals and specifically the 50000 odd New Zealanders with shares in the airport-especially in an election year! Its just mind boggling.

We all know Cullen and his socialist mates hate private property rights and clearly business because here he is again stomping his little legislative pen and clipboard all over these rights.

That is, people have a property right in the shares they own in the airport and they have a right to sell them to whomever they wish, under the current tax laws which exist. Retrospectively changing the tax laws just because you can isn't a sensible way to oversee business because business needs to be able to function with surety of the current laws in which they trade under. They no longer have that in this respect.

By becoming involved in a transaction between its private citizens in this way the Labour Party have effectively wasted the time of all the parties involved. CPPIB , Auckland Airport and the shareholders involved.

Millions of dollars have also been flushed down the bog, because it costs to do these large deals. In this case it has cost shareholders like me money. Lots of it.

The interfering has wiped hundreds of millions from the capital value of the airport- down 13.5% or 38c to NZ$2.45- and therefore shareholders wealth and given notice to other overseas companies thinking about buying businesses in New Zealand to think again-if the government doesn't want it sold they will simply regulate in some way to stop it. It isn't your business anymore if you don't have the ultimate say about what happens to it.

Now investors know that Cullen and his minor party supporters have been against this sale from the beginning, almost 1 year ago. Winston "baubles" Peters has spoken about this many times and so has Cullen, Both early in the sale saga.

My question to Cullen is then, if you were against this sale from the beginning then why didn't you move to stop it at its inception? He certainly knew about the "tax issues" with the airport amalgamation but chose to sit on this harebrained half arsed intention till the very last minute.

He has also been aware that the announcement made today would have been consequential to the sharemarket value of AIA and has kept it secret from the NZX, CEO Mark Weldon's office and therefore the shareholders invested in AIA, and so should have informed the market alot sooner and alot less clumsier than he has.

I wonder if Weldon will be giving the minister a "please explain" letter? Doubt it.

The Canadian Pension Plan Investment board say they will "push on" with the deal and were aware of IRD approval when making their bid. I'm sure they didn't factor in todays turbulence though.

Finally, pissing off 50000 mums and dads when you have been nuked in the polls, your leader is melting down, and in an election year just isn't very bright.


Related Share Investor reading

NZ Herald: Airport Deal not so sweet after tax break blocked
NZX Press Release: AIA directors recommend shareholders sell
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares

Share Investor 2008

NZ Herald: Airport deal not so sweet after tax break blocked

Canadians bidding for 40 per cent of Auckland Airport had offered a type of share that would yield tax breaks.

Additional media coverage of this story - Direct links to story

Stuff
NBR
Radio New Zealand

Opinion piece from Share Investor at end of the day.

By Grant Bradley , 26.02.08, NZ Herald

A multi-million-dollar tax break that would have sweetened a Canadian pension fund's bid for control of Auckland International Airport(AIA) was blocked in a surprise move by the Government last night.

The urgent measure relates to what are known as stapled securities, which allow companies to pay tax-deductible interest to shareholders instead of dividends.

Changes will be retrospective and the announcement was made without prior consultation with interested parties "because it is a matter of urgency since some companies may be contemplating the issue of the type of stapled stock in question", Finance Minister Michael Cullen and Revenue Minister Peter Dunne said.

The Canada Pension Plan and Investment Board (CPPIB) planned to issue stapled securities as a "tax-efficient" device as part of its offer to airport shareholders.

The Inland Revenue Department says hundreds of millions of dollars could have been caught up in the deals if the securities had become popular.

Policy manager Emma Grigg said the Canadian proposal had not been specifically targeted but plans outlined in the company's prospectus would be covered by the changes.

The CPPIB had early yesterday been talking up the chances of its bid succeeding after a change of tack by the airport board. Last night, it said it would not respond to the tax change announcement until today.

The ministers said the change would be included in the next available taxation bill and, once enacted, would apply to stapled stock issued or stapled on or after yesterday.

"If those instruments were to become common in New Zealand the amount of debt deductions against our tax base could increase significantly. The issue becomes particularly acute if the instruments are issued to foreign investors in New Zealand companies."

The change will also deal a blow to potential earnings for Auckland councils. Auckland City Council has a 13 per cent stake in the airport and Manukau City has just over 10 per cent. Although neither is selling its shares, both were hoping to gain tens of millions of dollars a year.

A market source said "anyone who thought they were voting for this to get a tax advantage should think again".

Paul Ridley-Smith of investment company Infratil, which opposed the Canadian bid, said it looked like it was back to the drawing board for CPPIB. It has undertaken to restructure the company by way of an amalgamation process - to unlock capital and make it more tax-efficient for shareholders.

"If the Canadian deal had been done as a single transaction - which is to bring in a new shareholder, new management and change the capital structure - we had absolutely no problem," he said.

"But with the Canadian deal the restructure happens after they've got to 40 per cent. So the question has got to be asked what is the overriding commercial purpose of the amalgamation. If it is predominantly to get a tax benefit, then we would think it wasn't going to get approval from Inland Revenue."

The CPPIB had not sought an IRD ruling on the amalgamation plan before making its offer.

Prior to the ministers' announcement yesterday, the airport's board recommended shareholders sell their shares. That was a reversal of its position in December, when it advised shareholders against accepting the partial takeover bid but by a majority of 4-2 maintained its recommendation to vote against the offer.

Board chairman Tony Frankham said directors wanted to ensure nobody missed out on any premium if shareholders voted yes to the offer.

CPPIB vice-president Graeme Bevans said the change of recommendation was "fairly predictable". "They're ... a relatively new board and this is a very difficult decision."

In August last year, Trade Negotiations Minister Phil Goff dealt a fatal blow to a Dubai Aerospace Enterprise takeover bid when he said the Government did not want to see key public utilities sold off.

Shares in Auckland Airport closed up 3c to $2.83 yesterday, off its year high of $3.50 struck in July last year.

Related Share Investor reading

NZX Press Release: AIA directors recommend shareholders sell
AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares


Links c Share Investor 2008

Helen Clarks slipping teflon makeup leaves her naked

c Moreu 2008, from Stuff The crystal ball


Watch Video: Helen Clark on poll result (Newstalk ZB)


Helen Clarks spectacular outburst today, blaming the media for her and her party's bad showing in the latest political polls out last week, on a rampant media with the sole purpose of having her removed from parliament seems more than a little laughable considering the huge left-wing bias in the majority of the mainstream stuff written.

Clark has had them in her clutches, and mostly on her side for the last 9 years and her conspiracy theory that the media are out there to get her have shades of Robert Muldoon(yes I'm that old) as he crumbled drunk from office, and the worlds greatest conspiracy theorist when it comes to the media, Winston"Baubles" Peters.

I guess it is true what they say huh, you lie down with lapdogs...

The thin veneer of humanity left in Clark has slipped, like last weeks chardonnay and fish and chips, into the compost bin.

You can almost see her true personality soaking through the gritted stained teeth, and the unhinging looks more lovely everyday.

She has attacked the media in the past, when they don't say what she thinks is acceptable and a usually politically savvy Clark(probably the best political animal NZ has ever seen) has attacked a media, rightly or wrongly, in election year as being too stupid to make up their own minds about the PMs popularity.

Does she now expect them to go easier on her after that?!

Audrey Young and Fran O'Sullivan are no doubt sharpening their pens for another bite at the bitch again tomorrow, pass the dynamite.

Still there is always the ever present Electoral Finance Act for her to fall back on. Its eyes over ones shoulder are ever present.

I'm picking a landslide win to National come election 2008.


Related links

Labour has 'work to do' - Clark



c Political Animal 2008

Sky City 2008 half year exceptional on cost cutting

The initial reaction by Mr Market this morning to the Sky City Entertainment [SKC.NZX] announcement was to market down the share price to new lows. At current time of writing this, 5.00pm (NZ time) the share price was up 9c to 4 bucks NZ, although it had been up to $4.10 earlier today.


Key figures at a glance

- Revenue up 1.0% to $424.2m (+$4.2m)
- EBITDA up 9.1% to $161.4m (+$13.4m)
- EBIT up 13.1% to $125.6m (+$14.5m)
- Net Profit (before Cinemas write-down) up 36.2% to $61.3m (+$16.3m)
- Net Profit after Cinemas write-down $1.3m.
- Focus on managing operating margins
- Strong results in Darwin and international VIP play
- Auckland steady through refurbishment
- Improving Adelaide performance
- Weak Cinemas result.
-Adelaide Casino no longer for sale
-Profit guidance for full year, $108m to $110m (excluding Cinemas write-down)
-New CEO Nigel Morrison starts on March 3

Full NZX SKC profit announcement

Related Media reports

SKY City Profit Plunges
Cinemas drag Sky City down
Sky City first half plunges - Bloomberg


I think shareholders who hadn't been aware of the abnormal write-off figure of NZ$60 million for the SKC cinema division and saw the 1.2m profit, down 97% from last year got spooked. It pays to do research. Media also wrote headlines like SKY City Profit Plunges. Punters don't seem to want to read further than the headline.

Although profit was impacted in the same comparable period in 2007, so comes off a low base, the NPAT at 37% higher is clearly an excellent outcome. Off a very small revenue increase that result looks even better.

The most encouraging result is a small increase in revenue at the Auckland Casino, the company's main driver of profit. Considering the gaming floor has been interrupted by renovations this is a good sign things are being managed better. Clearly costs have been cut and hopefully that means there will not be any long term impacts from that cost cutting.

The VIP gaming sector looks to have fallen the casinos way this year, last year players cleaned the casino out.

Hamilton has a small increase in revenue and a larger increase in EBIT, so costs have been lowered at this outlet as well.

One of the stars of the show, is my favourite casino in the whole bunch, Darwin.

A Casino unencumbered with too much regulation, that still allows smoking, is situated in a boomtown, and is close to the Asian market. A great recipe for future success.

Revenue has increased strongly over the half by over 10%, but EBIT has soared by almost 30%, indicating a good handle on running costs.

The future looks rosiest at this outlet and wouldn't be surprised if it became the star of the show in the distant future, overtaking the Auckland Casino for group contribution.

Adelaide Casino, looks awful. Revenue and all other profit indicators have slipped. An added factor is that smoking has been totally banned from the premises. As longer term SKC shareholders know, that has a huge impact on profit for New Zealand operations when introduced in 2005.

Quite frankly, I'm not sure if management can turn this casino around, its a drag on company profits and only seems to be there to accumulate tax losses in my mind.

The tiny Queenstown casino achieved a stellar turnaround but is largely immaterial to the group result.

Sky City Cinemas have been written off, so the less said about that white elephant the better. It needs to be sold to some other poor sap. It hasn't done well and contrary to popular belief Hoyts, Sky City Cinemas competition, isn't having the same problem indicated by SKC management that revenue was down because of "bad weather and poor product". Its bad management pure and simple.

Overall the last half year was very pleasing to this shareholder, although parts of the group clearly need working on.

My main worry is that alot of the profit increase has been brought about by cost cutting and I'm not sure whether that is a short sighted thing. Hopefully it is prudent cost cutting. It also will be worth noting whether the costs cuts are one-offs or to be attributed annually.

It is something Elmar Toime, the acting CEO, successfully did at NZ Post and it appears his appointment had the desired effect at Sky City.

It will be up to the New CEO, Nigel Morrison, to drive the revenue and therefore the profit of the company going forward.

Management are "positive" for the coming half year.


Disc: I own SKC shares in the Share Investor Portfolio


Sky City Convention Centre @ Share Investor

Share Investor discusses Convention Centre proposal with CEO Nigel Morrison
Sky City Convention Centre Expansion a Money Loser: Part Two
Sky City Convention Centre Expansion a Money loser
SKC Convention Centre power-point slide illustrations & SKC submission to Auckland City Council

Sky City Entertainment Group @ Share Investor

Sky City Entertainment Group Ltd: Presentation to Macquarie Group
Morningstar Revalues Sky City Entertainment Group
Guest Post - Michele Hewitson Interview: Nigel Morrison
Failed Sky City bid for Christchurch Casino good news for Shareholders
Sky City Entertainment Group Ltd: Christchurch Casino bid falls short of Investment Criteria
Sky City Entertainment Group Ltd: Never mind the width feel the volume
Sky City Annual Meeting & 2011 - 2012 Profit Forecast
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Sky City Entertainment Group Ltd: Download full Company analysis
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Sky City Entertainment Group 2010 Interim Profit Review
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Discuss SKC @ Share Investor Forum
Download SKC Company Reports

Recommended Amazon Reading


The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) by Benjamin Graham
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c Share Investor 2008

NZX press release: Sky City Entertainment HY profit to end of Dec 2007

HALFYR: SKC: Summary half year to 31/12/07 $1.3m ($45.0m) -97.1%, 11.0 cps

SUMMARY OF PRELIMINARY HALF YEAR ANNOUNCEMENT

Name of Listed Issuer: SKYCITY Entertainment Group Limited

For half year ended: 31 December 2007

CONSOLIDATED OPERATING STATEMENT
Current Half Year NZ$'000; Up/Down %; Previous Corresponding Half Year NZ$'000

Total Revenue:
$424,189; up 1.0%; $419,973

OPERATING SURPLUS BEFORE UNUSUAL ITEMS AND TAX:
$82,616; up 28.8%; $64,123

Unusual items for separate disclosure:
$60,000 Cinemas write-down; $0

OPERATING SURPLUS BEFORE TAX:
$22,616; down 64.7%; $64,123

Less tax on operating profit:
$21,992; up 15.6%; $19,030

OPERATING SURPLUS AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER:
$1,287; down 97.1%; $45,045

Extraordinary items after tax attributable to Members of the Listed Issuer:
$0; nil%; $0

OPERATING SURPLUS AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER:
$1,287; down 97.1%; $45,045

Earnings per share:
0.3 cps; 10.3 cps

Interim distribution:
11.0 cps

Record Date: 12 March 2008. Date Payable: 11 April 2008

Attachments: Appendix 1, 7 and related documents

--------------------------------------


SKYCITY ENTERTAINMENT GROUP LIMITED

Executive Director's Review
Half Year Ended 31 December 2007


1H08 Group Result
- Revenue up 1.0% to $424.2m (+$4.2m)
- EBITDA up 9.1% to $161.4m (+$13.4m)
- EBIT up 13.1% to $125.6m (+$14.5m)
- Net Profit (before Cinemas write-down) up 36.2% to $61.3m (+$16.3m)
- Net Profit after Cinemas write-down $1.3m.

Key Elements of 1H08 Result
- Focus on managing operating margins
- Strong results in Darwin and international VIP play
- Auckland steady through refurbishment
- Improving Adelaide performance
- Weak Cinemas result.

Distribution to Shareholders
- Interim 1H08 11 cents per share (9cps 1H07)
- Entitlement/record date 12 March, payment date 11 April
- Distribution continues at 90% x Net Profit after adding back Adelaide casino licence amortisation and excluding Cinemas write-down
- Distribution by way of non-taxable bonus shares with fully-imputed cash buyback alternative continued for 1H08
- Strike price for the bonus share issue for the 1H08 distribution will be the weighted average SKC price on the NZSX during the 5 day period 13-19 March
- Advice of the number of bonus shares to be issued in respect of the 1H08 distribution to shareholders on 26 March
- Shareholder elections (to elect the cash/buyback option) are due to the share registry (Computershare) by 9 April.

Underlying Net Profit
- Reported results include several elements that need to be separately identified to enable a like with like comparison of 1H08 core asset performance against 1H07
- Key elements adjusted for are:
- International VIP play above theoretical win rate
- Cinemas and Cinemas write-down
- Indirect expenses to cover one-off restructuring costs, due diligence costs involved in the takeover activity which has now ceased, and the Cinemas sale process
- Tax at the company's normalised rate of 28.5%
- Excluding these items show underlying operating earnings (EBITDA) growth at 3%, up from $148.2m to $152.7m and NPAT growth at 15%, up from $48.0m to $55.2m.

Cinemas Write-Down and Sale
- During 1H08 SKYCITY invited bids from parties interested in acquiring the Group's cinema assets
- Based on disappointing operating figures for 1H08 and negotiations with potential buyers, a $60m write-down in the carrying value of the Cinemas assets (market announcement 12/2/08) has been made in the FY08 interim financial statements
- The write-down includes all goodwill relating to Cinemas and a provision against non-performing cinema assets and potential sale or restructuring costs
- Negotiation with potential buyers continues. If a satisfactory price and sale structure is not able to be achieved the company will evaluate restructuring and revenue regeneration options
- Further information will be provided once negotiations are concluded and the final position determined.

Funding and Capital Management
- Control of capital expenditure and earnings retained under the profit distribution plan have reduced debt and lowered funding costs, down $4m (9%)
- SKYCITY's funding is not affected by the worldwide 'credit crunch' with long-term debt in place and no current refinancing requirements
- 1H08 average interest-bearing debt and average interest rate are $1.09 billion and 7.7% respectively.

Other Announcements/Updates
Adelaide
- The Company advises that the Adelaide casino will be retained as a core gaming asset
- performance in the half year has been encouraging
- cost control improved operating margins
- key focus remains on increasing market share in the competitive gaming machine market

Takeover Activity
- All discussions with interested parties have now ceased
- Directors and management remain focused on generating value for shareholders through improved performance
- due diligence costs (advisors, other) are provided for in the half year results

CEO Appointment
- New SKYCITY CEO Nigel Morrison commences on 3 March.

Profit Guidance FY08
- SKYCITY reaffirms its FY08 NPAT guidance as previously provided, namely in the range of $108m to $110m (excluding Cinemas write-down)
- Based on the half year result the company expects to be at the upper end of this range
- Factors to consider in the guidance include:
- international business performance for 2H08 budgeted at theoretical win levels
- customer reaction to the full opening of the Auckland main gaming floor
- ongoing effect of no smoking on Adelaide performance
- continued management focus on operating margins
- excludes Cinemas write-down.



Business Unit Results: 1H08
Auckland
- Total Revenue up 0.8% to $205.3m (+$1.6m)
- EBITDA up 0.4% to $107.7m (+$0.4m)
- EBIT up 1.6% to $91.2m (+$1.4m)
- Gaming revenues flat with a 4% decline in gaming machines, as a result of the main gaming floor refurbishment, offset by table games growth of 7%
- All non-gaming activities achieved modest revenue gains on 1H07
- Cost management held direct/indirect expenses to 1% increase, effectively absorbing inflationary wage and cost increases
- The new baccarat area, one of the early stages of the main gaming floor refurbishment, contributed to the improved local table games performance
- The main gaming floor refurbishment includes the redesigned Aces Bar and Deli, each achieving revenue growth of more than 60% over 1H07 and the new Baccarat Bar has also performed well
- SKYCITY Grand Hotel occupancy up from 44% to 50% for the half year
- Conventions revenue up 4.6% with number of events and delegates up 4% and 3% respectively over 1H07.

Adelaide
- Total Revenue down 2.2% to A$62.5m (-$1.4m)
- EBITDA up 7.1% to A$12.0m (+$0.8m)
- EBIT up 19.4% to A$7.4m (+$1.2m)
- SKYCITY board has confirmed retention of the Adelaide casino as a core gaming asset
- Smoke-free regulations introduced in South Australia from 1 November 2007. November/December 2007 revenues were down 8% on November/December 2006. Table games revenues were favourable by 1% but gaming machine revenues were unfavourable by 13%
- Smoke-free impact reduced in January 2008 with gaming machine revenue down 8% compared to January 2007
- Table games not significantly impacted as smoking restrictions within one metre of gaming tables have applied since December 2004
- Effective cost management with direct/indirect costs down 4%
- EBITDA/EBIT contribution and margins moving in the right direction with work still to be done.

Darwin
- Total Revenue up 10.9% to A$54.9m (+$5.4m)
- EBITDA up 25.7% to A$23.5m (+$4.8m)
- EBIT up 29.9% to A$20.0m (+$4.6m)
- Strong growth momentum continues with significant EBITDA/EBIT growth and improved margins
- Good overall performance with growth from gaming machines, food and beverage and hotel
- Gaming machines up 14% on 1H07 and 24% up on 2H07 due to increased visitation from lower to mid-range players
- Food and beverage revenue up 11% and convention revenue up 5%
- Strong hotel performance with occupancy of 88% (1H07 85%) and average room rate up 10% to A$189. Hotel was joint winner of 2007 AHA National Awards for Excellence "Best Superior Accommodation"
- Increased revenue and cost management lifted EBITDA margin from 38% to 43%
- A$30m stage 1 expansion of the Darwin property commenced October 2007. Includes an indoor/outdoor restaurant, destination bar and balconies with sea views, improvement of back of house support facilities and additional car parking. Completion estimated December 2008
- 2H08 growth not anticipated to continue at same rate with some disruption expected from the gaming floor expansion through peak season.

Hamilton
- Total Revenue up 2.6% to $20.0m (+$0.5m)
- EBITDA up 2.0% to $10.0m (+$0.2m)
- EBIT up 4.1% to $7.7m (+$0.3m)
- Gaming revenues up 3.1% with growth flowing through to EBIT
- New gaming machine product, plus the opening of the new Vue Bar in December 2007, has improved gaming floor visitation and average spend.

Group International Business (IB)
- Group total win net of commissions, comps and taxes $15.6m (1H07 $2.7m), theoretical $4.1m (1H07 $12.1m), above/(below) theoretical +$11.5m (1H07 -$9.4m), Group total EBIT contribution $12.6m (1H07 -$1.2m)
- Auckland win net of commissions, comps and taxes $5.4m (1H07 -$2.9m), theoretical $2.1m (1H07 $10.0m), above/(below) theoretical +$3.3m (1H07 -$12.9m), EBIT contribution $3.9m (1H07 -$5.0m). Auckland 1H07 saw significant commission programme play turnover, resulting in higher commission costs.
- Adelaide win net of commissions, comps and taxes A$4.1m (1H07 A$4.4m), theoretical A$1.2m (1H07 A$1.5m), above/(below) theoretical +A$2.9m (1H07 A$2.9m), EBIT contribution A$3.2m (1H07 A$3.2m)
- Darwin win net of commissions, comps and taxes A$4.6m (1H07 -A$0.3m), theoretical A$0.2m (1H07 A$0.2m), above/(below) theoretical +A$4.2m (1H07 -A$0.5m), EBIT contribution A$4.2m (1H07 -A$0.5m)
- IB EBIT comprises gross revenue $21.9m (1H07: $18.0m) less commissions, complimentaries and taxes $6.3m (1H07: $15.3m) equals net win after commissions complimentaries and taxes $15.6m (1H07: $2.7m) less IB expenses $3.0m (1H07: $3.9m) equals IB EBIT $12.6m (1H07: -$1.2m)
- The International Business model has been reviewed with improved/increased marketing bringing in a greater range of players across all programmes
- Significant individual and group play can produce volatility in International Business performance. The intent of marketing initiatives is to diversify and spread this risk across a broader customer base
- 1H08 experienced growth in visitation from key Asian markets, which has continued into 2H08 with group visits into Auckland and Darwin over Chinese New Year
- Win was $11.5m above theoretical compared to $9.4m below theoretical in 1H07.

SKYCITY Queenstown Casino (60% shareholding)
- Revenue growth of 20% over 1H07 with gains from gaming machines (+12%), table games (+22%) and food and beverage (+18%)
- Additional marketing activity has driven visitation and revenue with positive improvement to EBITDA and EBIT
- Strong January/February Queenstown tourist activity has seen a positive start to 2H08.

Christchurch Casino (41% shareholding)
- 1H08 contribution up $0.2m to $2.7m.

SKYCITY Cinemas
- Total Revenue $32.5m (1H07 $35.0m)
- EBITDA $2.0m (1H07 $4.6m)
- EBIT -$1.3m (1H07 $1.7m)
- Cinemas 1H07 includes revenue of $2.0m from SKYCITY Metro which was sold in June 2007. Adjusted, Cinemas revenue is down 1.5% on 1H07. Cinemas EBITDA is down 28.6% on 1H07 after excluding SKYCITY Metro 1H07 contribution
- Cinemas revenues continued to disappoint being flat against 1H07 with no uplift being achieved from a full six months operation from Chartwell, Hamilton (opened May 2007)
- Flat revenue compounded by increased costs and depreciation has led to a decline in profit and margin
- Poor performance during 1H08 has affected value which has led to the decision to write-down the Cinema assets by $60m.

Group/Unallocated
- Revenue of $2.7m relates mainly to interest received
- Indirect expenses of $17.3m include $3.1m of costs relating to takeover activity and the process to sell Cinemas, and $1.7m of restructuring costs
- After allowing for non-recurring costs, indirect expenses are down $2.9m, 19%.

Capital Expenditure
- 1H08 capital expenditure was at reduced levels as business plans and major projects underwent further review
- Material projects during 1H08 have been the Auckland main gaming floor refurbishment, Hamilton entertainment bar, commencement of Darwin Stage 1 expansion and new cinema developments
- Guidance provided with the FY07 result included the SKYCITY Adelaide redevelopment and car park project which is on hold pending a review of the Adelaide business plan
- Plans for the proposed SKYCITY resort and the associated Little Mindil site reclamation are yet to be finalised
- Main items of capital expenditure expected during 2H08 are completion of the Auckland main gaming floor refurbishment, Darwin Stage 1 expansion and purchase of the Little Mindil land
- Group (excluding Cinemas) maintenance capex for FY08 expected to be below or at the lower end of previous guidance of $37m-$45m
- FY08 depreciation and amortisation guidance (excluding Cinemas) is reduced from $72m to $68m.

Conclusion
- Looking past the disappointing Cinemas outcome, 1H08 has delivered more acceptable results given:
- the disruptions of management change, takeover approaches, and asset sale reviews
- work on the Auckland main gaming floor.
- Looking forward, the company anticipates continuing positive trends in performance, based on:
- appointment of Nigel Morrison
- completion of the Auckland renovation
- Adelaide opportunity and expansion in Darwin
- ongoing focus on the core gaming business.

Disclosure: I own SKC shares


Related Share Investor reading

Sky City Cinemas no Blockbuster
Sky City Entertainment share price drop
New Broom set to sweep
Sky City Management: Blind, deaf and numb
Sky City sale could be off
Opposition to takeover
Premium for control
Sky City receives takeover bid
Sky City Casino Full Year Profit to June 30 2007
Setting the record straight
Sky City CEO resigns
Sky City Casino: Underperforming
Sky City Casino 2007 HY Profit(analysis)
Sky City Casino 2007 HY Profit

NZX press release: AIA directors recommend shareholders sell

Auckland International Airport directors are split on the merger with CPPIB.
Previously they have been recommending shareholders hold their shares.

Media comment:

Board says sell to Canadians
Directors recommend Canadian bid for Airport

Watch Video: Tony Frankham on why he opposes the bid




AIA, 8.57 am NZ time, AIA board recommends shareholders sell

The directors of Auckland Airport today unanimously recommended that shareholders should sell their shares into the takeover offer from the Canada Pension Plan Investment Board (CPPIB) for $3.6555 per share (less the 5.75 cents per share interim dividend to be paid next month ).

However directors are not unanimous on whether shareholders should vote in favour or against CPPIB acquiring up to 40 per cent of the company.

A majority of the Airport board, comprising Tony Frankham, Keith Turner, Lloyd Morrison, and John Brabazon, are maintaining their recommendation for shareholders to vote against CPPIB acquiring 40 per cent of Auckland Airport as they believe the shares in the company are likely to be worth more longer term without CPPIB involvement.

Two directors, Richard Didsbury and Joan Withers, believe that shareholders should vote in favour of the offer as the price offered by CPPIB is unlikely to be available to shareholders in the foreseeable future.

For the transaction to proceed, the Takeovers Code requires a majority of shareholders who vote to approve CPPIB acquiring a 40 per cent stake. If this approval is not gained, the bid cannot proceed, regardless of the number of shares offered for sale.

Chairman of the board, Tony Frankham, said all the directors had carefully considered whether to revise their advice to shareholders on both elements of the transaction in light of the change in financial markets.

"All directors acknowledge that the market conditions have changed significantly since this bid was announced and this key factor has given rise to the need for directors to update their earlier recommendations.

"We all agree that shareholders would be unwise not to realise part of their holding at the favourable partial offer price if the partial offer receives approval to proceed.

"Each director has also carefully considered a wide range of other relevant factors in reaching their own decision in relation to the "voting" element of this bid.

"Directors who continue to recommend that shareholders should object to the takeover are of the view that the long term value of Auckland Airport has not fundamentally changed.

"They regard Auckland Airport as a strategic asset with long term horizons and consider ownership should not be determined by shorter term market fluctuations.

"They believe that over the longer term the value of Auckland Airport shares is likely to be greater without CPPIB having a 40 per cent stake which gives it effective control."

Mr Frankham said those board members have consistently said that the partial offer does not fully reflect the longer term value of Auckland Airport and despite further presentation from CPPIB do not accept that their introduction as a significant minority shareholder will assist the company in any material manner.

"As a result they maintain their view that, when considered on a longer term basis, on balance the CPPIB partial offer is not in the best interests of shareholders."

He said that Richard Didsbury and Joan Withers believe that the price offered by CPPIB to shareholders for some of their shares is unlikely to be available for the foreseeable future.

"They believe that the partial offer of $3.6555 per share (less the 5.75 cents per share interim dividend to be paid next month) is even more attractive today, at a time when shareholders are faced with uncertain global conditions that may continue for some years to come.

"The impact of those conditions does in their view put downward pressure on the valuation of the company and given global economic conditions, a more favourable offer in all aspects is unlikely to be available to shareholders in the near term.

"Therefore on balance, they feel that the certainty of selling 40 per cent of the company for significantly more than its current trading price outweighs the disadvantages of bringing on board a significant minority shareholder without material aeronautical or tourism connections.

"These directors therefore recommend that shareholders vote to approve the offer and sell their shares".

As already advised, the directors consider it is not possible to identify an appropriate party and present an alternative proposal to shareholders before the expiry of the CPPIB bid period on 13 March.

Mr Frankham said that if the CPPIB bid fails, the board will continue to seek a suitable cornerstone shareholder to take a smaller stake in the company however that process may take some time given the current state of financial markets.

"We envisage that it will continue to be challenging to meet all of the variously stated objectives of shareholders in relation to percentage holding, capital restructuring and non dilution of the Council interests," he said.

- ends -

For further information, please contact:
Lucy Powell
Head of Communications
+64 9 256 8866
+64 21 995 710

Footnote:
Auckland Airport has declared a fully imputed interim dividend of 5.75 cents per share payable on 12 March 2008 to shareholders on the register as at 7 March 2008. As the interim dividend will be paid prior to the close of the CPPIB offer, decreasing the equity value of Auckland Airport by an equivalent amount per share, the offer price will be adjusted in accordance with the terns of the takeover offer by the amount of the interim dividend. Accordingly, the offer price will be reduced by 5.75 cents per share from $3.6555 per share to $3.5980 per share. It is expected that the final dividend will be reduced by an amount of 2.00 cents per share, reflecting the increased interim dividend paid to shareholders now.



Related Share Investor reading

AIA profit stays grounded
Softening opposition to CPPIB bid for AIA
Directors of AIA bribe brokers not to sell
What is Auckland Airport worth to you?
Second bite at AIA by CPPIB might just fly
AIA new directors must focus on shareholders
Auckland Airport merger deal nosedives
The Canadians have landed
AIA incentive scheme must fly out the window
Government market manipulation over AIA/DAE deal
DAE move on AIA: Will it fly?

Disclosure: I own AIA shares


Links c Share Investor 2008