Monday, February 18, 2008

Softening opposition to Canadian Pension Plan bid for Auckland Airport

The long winded takeover saga that is Auckland International Airport [AIA.NZ] coming up to one year in July, rolls on with a further possible development revealed today.

Links courtesy of NZ Herald


AIA takeover calendar

Early March: Auckland City Council votes on its response to CPPIB offer
March 6: Deadline for Auckland airport board to review its objection
March 13: CPPIB offer deadline for shareholders



According to the AIA board:

"The market has changed significantly since December so we have an obligation to review our recommendation. The board considers that it has a responsibility to whether the reconfirm its recommendation or otherwise."

Its only a suggestion that the board will take into account negative "market conditions" but it is curious to me why the board would waiver on their previous uncompromising stance that they wouldn't support a bid by the Canadian Pension Plan Investment Board(CPPIB) for an almost 40% share of the Airport company.

It seems short sighted, to say the least that the AIA board might backtrack on previous statements around the long-term value of the company and now even consider lightly the short term vagaries of global markets.

That idea should be dismissed forthwith and any recommendation to sell or hold should be made by shareholders in the company as to whether they would want to part with this asset.

Both Auckland and Manukau City Councils have said they wouldnt sell their shares but Auckland remains open to supporting the partial takeover on which they will vote on soon.

The outcome still remains up in the air but institutions must be pressuring the likes of the Councils to approve a partial takeover given their partiality to cut and run and take short term profits.

I will stick my neck out and pick it will fail, because the deal seems too complex and local council political egos are involved. Much like the failed merger of Port of Tauranga(POT) and Port of Auckland last year.

We can but wait.


Disclosure: I own AIA shares


Auckland International Airport @ Share Investor

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Related Links

AIA Financial Data


Related Amazon Reading

Mergers, Acquisitions, and Corporate Restructurings

Mergers, Acquisitions, and Corporate Restructurings by Patrick A. Gaughan
Buy new: $47.25 / Used from: $41.94
Usually ships in 24 hours


c Share Investor 2008

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