Auckland International Airport Limited (AIA)

[tycoon_1]

well the infratil annoucement came after market closed. Expect a positive reaction tomorrow.

[Toddy]

With infratil accepting and all the big funds to follow we could be in danger of going way past 40% which will mean not all are shares will be sold.

As for the canadians dropping the voting rights it gives Helen Clarke a good excuse to allow the sale. She has been coming under increasing pressure for her stance and this gives her a way out.

Im fairly confident the bid will now succeed and am rather suprised the shareprice hasnt responded more than it has, or are shares bought now not eligable?

Rakin

The announcement by IFT was disclosed after the NZX had finished trading for the day. We will understand more tomorrow once the market opens.

[Toddy]

Helen will be happy. The people of Auckland will get to keep their holding and the Wellingtonians (IFT) want to sell. I expect the SP will give us the odds of this deal crossing the finish line within 10 minutes of opening in the morning.

Manukau City Council refuse to sell airport shares
New 6:47PM Tuesday March 11, 2008

Manukau City Council today decided not to support the Canadian Pension Plan Investment Board's offer to buy its share in Auckland International Airport.

Mayor Len Brown said the decision was made after considering the recent CPPIB statement regarding its voting rights.

"We recognise the proposal is now a lot closer to the councils position and we appreciate that. However, it is the councils view that the proposal is still not in the best long term interests of the airport, the city and its residents," Mr Brown said.

ALSO

By NZPA
Tuesday 11th March 2008

The Canadian pension fund bidding for Auckland International Airport is likely to succeed provided it gets the bids in, competition lawyers said today.

The Canada Pension Plan Investment Board (CPP) over-trumped the Government attempt to trump its bid for 40% for AIA when it said yesterday it would limit its voting rights to 24.9%.

That means its should no longer need Overseas Investment Commission approval, circumventing the cabinet ministers' right to veto the deal.

The Government last week tightened overseas investment regulations in what was widely seen as a poll-driven move based on the unpopularity of foreign companies buying large New Zealand assets.

Lawyers spoken to by NZPA said the cabinet ministers who have been given power of veto -- Land Information Minister David Parker and Associate Finance Minister Clayton Cosgrove -- will be hard pressed to justify intervention with the Canadians having less than 25% voting control.

"If they have under 25%, they should be right," said Grant David of law firm Chapman Tripp.

One of the key criteria for Overseas Investment Commission approval is the 25% threshold.

"If you are not caught by the threshold, the fact that the ministers, or the Government of the day, doesn't particularly like what you want to do, then you are free to do it," David said.

"The Overseas Investment Act is there as a protection and if you are under the boundary, then you are not caught by the regime."

David said if the proposal has been reshaped so it doesn't require OIC consent, then there was no scope for ministerial interference.

"It then comes down to a commercial decision as to whether the scheme represents value."

A senior competition lawyer who declined to be identified, said it appeared as though the regulations had invited CPP to make its vote limiting move.

"The regulation looked as though it had been drafted to invite people to construct these kinds of arrangements to preserve control but not to prevent ownership passing."

He said it was unclear whether the law drafter had attempted to limit a foreign backlash against laws restricting foreign ownership.

Whether the deal succeeds "may depend ultimately on whether the ministers decide their political hides depend on blocking it. The whole thing was poll-driven," the lawyer said.

Because the CPP bid, at $3.60 per share, is nearly 60% above the prevailing share price, there seems little doubt it will get the 39.9% is seeks. The bid closes on Thursday and CPP before the start of business today had over 20.5% of the company.

The deal also requires a vote in favour and around two thirds of the 19.2% who had voted, supported the proposal.

When he announced the tighter investment criteria last Monday, Finance Minister Michael Cullen said the changes had been made in response to the uncertainty and debate that had surrounded the CPP bid.

AIA shares were up 3 cents to $2.28 in mid-afternoon trading today.

[ratkin]

My guess would be around 2.50 , cant see it going too high as people have been burnt once too often on this one

[COLIN]

I'm still a little confused about where the threshhold is, for having to gain OIO approval. For instance, if the Canadians were seeking 50.1% of the total shares on issue, but limiting their voting rights to 24.9% (apart from resolutions affecting their 50.1% holding) are the commentators (quoted above) saying that they wouldn't need to go near the OIO? I find that a bit hard to believe.

[CJ]

Colin - they are only going for 40%.

I think the key is that the OIO only looks at issues of control, not ownership. Therefore with control under 25% (despite ownership being 40%) they have no jurisdiction.

[Te Whetu]

It's always easy - deciding what other people should do.

Heh, so do you only every comment on issues relating to shares that you hold?

In any case, many have voiced an opinion on what the government should do... EVEN if they own shares they are deciding what the government should do (someone else). So i don't own shares in AIA; does that mean I shouldn't voice an opinion on what the government should do?

Also lets consider this is a forum, and as such is here to promote discussion. If people get critical every time there's an opinion on what someone else should do, then the amount of discussion would drop. Threads would only have postings from one side, and everyone would then pat themselves on the back for being in a perceived majority; only shareholders would comment and they all believe it's worth owning the share, you would never get a view from people who have a contrary view.

Lets also consider that if no one has an opinion on what the government should do then they will just do what they want, there would be no limits to their power and they WILL become corrupt. Basically the government should represent the people; so we need to have an opinion on what they do.

If you don't agree with my opinion, if you don't think the government should allow CPP to purchase 40% then explain why...

[Snow Leopard]

Heh, so do you only every comment on issues relating to shares that you hold?

In any case, many have voiced an opinion on what the government should do... EVEN if they own shares they are deciding what the government should do (someone else). So i don't own shares in AIA; does that mean I shouldn't voice an opinion on what the government should do?

Also lets consider this is a forum, and as such is here to promote discussion. If people get critical every time there's an opinion on what someone else should do, then the amount of discussion would drop. Threads would only have postings from one side, and everyone would then pat themselves on the back for being in a perceived majority; only shareholders would comment and they all believe it's worth owning the share, you would never get a view from people who have a contrary view.

Lets also consider that if no one has an opinion on what the government should do then they will just do what they want, there would be no limits to their power and they WILL become corrupt. Basically the government should represent the people; so we need to have an opinion on what they do.

If you don't agree with my opinion, if you don't think the government should allow CPP to purchase 40% then explain why...

There is an awful lot of do's in there

[shasta]

Heh, so do you only every comment on issues relating to shares that you hold?

In any case, many have voiced an opinion on what the government should do... EVEN if they own shares they are deciding what the government should do (someone else). So i don't own shares in AIA; does that mean I shouldn't voice an opinion on what the government should do?

Also lets consider this is a forum, and as such is here to promote discussion. If people get critical every time has an opinion on what someone else should do then the amount of discussion would drop. Threads would only have postings from one side, and everyone would then pat themselves on the back for being in a perceived majority.

Lets also consider that if no one has an opinion on what the government should do then they will just do what they want, there would be no limits to their power and they WILL become corrupt.

If you don't agree with my opinion, if you don't think the government should allow CPP to purchase 40% then explain why... but basically the government should represent the people; so we need to have an opinion on what they do.

Just ask any current/ex IFT shareholder what the Govt medling in the Aviation industry has done!

We should all have a say in this given the tie in AIA & AIR have (the taxpayer owning a majority share of AIR, plus the local Auckland Councils owning AIA).

We could have had Whenuapai developed by IFT & the Waitakere CC, (IFT were to invest $50m) except the Govt interferred to protect its own interests in AIR/AIA.

Yet to fly to Auckland from Wellington takes just under an hour, but it takes longer to drive into the city/shore, nevermind having the airport down south. Makes no sense to me

(Could help assist the Auckland trafficflow problem?)

To my mind the 24.9% - 40% ownership rangle is a beat up, 50.01% is required to exercise control, whilst 40% might get 2 directors on the board.

This may have presented the various councils an opportunity to sell down at a good price & re-invest the funds elsewhere, if they so desired.

I don't own AIA nor do i intend to, but a partial takeover at a premium should be left solely to shareholders to decide, NOT the Govt.

The Govt is clearly anti public/private partnerships, & my issue is that they should stick to looking after there SOE's & prevent them from being sold, & stay out of the market.

Far too much interference for my liking. :mad:

[COLIN]

Colin - they are only going for 40%.

I think the key is that the OIO only looks at issues of control, not ownership. Therefore with control under 25% (despite ownership being 40%) they have no jurisdiction.

CJ, I fully realise that the Canadians are only going for 40%. My point was that, in a hypothetical situation of an overseas party bidding for a majority of a NZ company's shares, but controlling less than 25% of those shares, are we absolutely sure that the OIO has no jurisdiction whatever?