NEW ZEALAND. The government today rejected the Canada Pension Plan Investment Board’s (CPPIB) NZ$1.7 billion bid for 40% of Auckland International Airport.
Land Information Minister David Parker and Associate Finance Minister Clayton Cosgrove said that under the recently revamped Overseas Investment Act they were declining consent as they were not satisfied all applicable criteria were met.
“In this case we are not satisfied that the “˜benefit to New Zealand’ criterion is met.”
AIAL shares fell by -11% in early trading as the market reacted adversely to the government intervention. Local media also reacted harshly. “Boy did they blow it – big time,” raged David Hargreaves of Fairfax Media on national website Stuff. “The whole Auckland Airport takeover saga has been a horrendous mess that reflects badly on everybody involved.” [Click here for the full article.]
As reported, AIAL shareholders had approved the NZ$3.60 a share bid from CPPIB. The Canadian investment group would have held voting rights for 24.9% of the shares.
CPPIB said it was “disappointed”. Head of Infrastructure Graeme Bevans said that under the terms of the offer the proposal would now lapse.
“Shareholders who accepted the offer are now free to deal with their holdings as they wish,” he said.
The Ministers noted: “We note the Overseas Investment Office advice that other countries also have foreign investment restrictions, including on airport ownership.”
The Overseas Investment Office said nine factors the ministers deemed to be of high importance were either assessed negatively or were not able to be conclusively assessed. These included the creation and retention of jobs, increased export receipts, additional investment for development purposes and New Zealand control of strategically important infrastructure.
Auckland Airport Chairman Tony Frankham said that while the decision of the Ministers is not consistent with the wishes of a majority of Auckland Airport shareholders who voted to approve the CPPIB takeover, the Board nevertheless needed to focus on moving the business forward.
“Directors will reconsider the issues of the company’s capital structure and the prospects for introducing a new cornerstone shareholder that could add strategic value.”
[comments]
Your post will appear – once approved – in The Moodie Forum on our home page
MORE STORIES ON AUCKLAND INTERNATIONAL AIRPORT
Haere Mai: Welcome to Auckland Airport’s new Arrivals duty free store – 03/04/08
Commerce Commission declines DFS Group acquisition of Nuance New Zealand – 31/03/08
