INTERNATIONAL. MAp Airports has struck an agreement with the Ontario Teachers’ Pension Plan Board (OTPP) to divest its stakes in Copenhagen and Brussels airports, and to raise its own stake in Sydney Airport.
The asset swap proposal was first announced on 22 June. MAp has signed a binding asset swap agreement with OTPP which will result in it acquiring OTPP’s 11.02% direct and indirect interest in Sydney Airport, giving MAp an 85% stake in its flagship location.
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“The asset swap proposal represents a transformational transaction for MAp, resulting in both an increased investment in Sydney Airport and the repositioning of MAp with sole focus on Sydney Airport.“ |
Kerrie Mather Chief Executive MAp Airports |
As part of the asset swap deal, OTPP is acquiring MAp’s interests in Brussels (30.8%) and Copenhagen (39%). MAp will also receive a cash payment of around A$791 million.
MAp Chief Executive Kerrie Mather said: “The asset swap proposal represents a transformational transaction for MAp, resulting in both an increased investment in Sydney Airport and the repositioning of MAp with a sole focus on Sydney Airport. Investors will benefit from the airport’s predictable, resilient and growing earnings.”
MAp is considering options for the simplification of its structure. It is envisaged that a cash amount of about 80 cents per stapled security will be made available to MAp investors after completion.
“This transaction will provide investors with a number of benefits and remains compelling despite the adverse impact of foreign exchange movements on the cash component,” Mather said.
“Since inception in April 2002, MAp has performed strongly for investors delivering a total security holder return of +14.2% per annum. This compares favourably to the ASX 200 at +5.5% per annum and the MSCI World Transportation Infrastructure Index at +10.5% per annum.
“However, in recent times the security price has not reflected the intrinsic value of MAp’s airport business. The directors and management believe that the security price will more closely reflect MAp’s underlying value through MAp entering a new phase focused on a single airport. This should facilitate a clearer appreciation of Sydney Airport’s underlying earnings profile and significant growth potential.
“Sydney Airport is an outstanding airport business and Australia’s premier gateway. Since MAp’s acquisition in June 2002, it has delivered EBITDA growth of +10.6% per annum when compared with passenger traffic growth of +4.8% per annum. Sydney Airport has also reported EBITDA growth in every quarter since June 2002, despite impacts such as volatility in oil prices, the global financial crisis and, more recently, devastating natural disasters in our region.
The transaction is expected to deliver cost savings to MAp investors as a result of:
• OTPP acquiring MAp’s UK operations
• MAp’s Sydney-based team relocating to Sydney Airport
• Other synergies including a single Chief Financial Officer (CFO) and the recently announced single Chief Executive Officer. MAp CFO Keith Irving has indicated he will step down at the end of 2011. He has agreed to remain with MAp until then to assist with completion of the transaction and other elements of the transition.
Completion of the deal is expected to occur in the fourth quarter of 2011. It still requires regulatory approval, including from the EU Commission.
Copenhagen Airport Chairman of the Board Henrik Gürtler said: “CPH is developing as the most important gateway to Scandinavia and Northern Europe. We are looking forward to pursuing this in cooperation with the new shareholder.”
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