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November 16, 2007

Offer price of $3.6555 per share, represents a premium of 37% over AIAL’s trading price just prior to pre-takeover speculation in May 2007.

AUCKLAND, NZ (November 16, 2007): The Canada Pension Plan Investment Board (CPPIB) today announced details of a partial takeover offer for Auckland International Airport Limited (AIAL) shares. The all-cash partial takeover offer will offer shareholders consideration of $3.6555 per AIAL share, which represents a value of 22.2x Auckland International Airport Limited’s FY2007 EBITDA. 

If successful, the offer will increase CPPIB’s shareholding in AIAL to 40%. CPPIB would then look to take all reasonable steps within its control to ensure that, as soon as practicable after completion of the offer, a CPPIB-led amalgamation proposal will be presented to all AIAL shareholders. 

Mark Wiseman, Senior Vice President – Private Investments for CPPIB said, “The price that CPPIB is offering to AIAL shareholders is a premium of 37% over the company’s trading price just prior to pre-takeover speculation.” 

“This offer is highly attractive for shareholders when compared to AIAL’s past trading prices, transaction and trading multiples and analyst valuations. We are confident that shareholders will recognise the value in this offer and accept it. 

“Should we achieve our objective of acquiring 40% of the shares, we will work with other shareholders to maximise the long-term value of the AIAL business. We intend to introduce additional international airport expertise to the Board, and will present an amalgamation proposal to the Board that, if successful, will result in a new optimised capital structure to benefit all AIAL stakeholders.” 

CPPIB believes that the partial takeover offer is the best result for AIAL shareholders following a lengthy, comprehensive process during which numerous parties have approached AIAL. CPPIB initially approached AIAL in June, subsequently undertook detailed due diligence, and has had comprehensive discussions with the management and Board of the company. 

In order to comply with certain Canadian regulations governing its investments, CPPIB will enter into a deed limiting its votes on resolutions to elect Directors to 30% of the votes able to be cast. That deed will apply to CPPIB’s holding in AIAL and to its holding in any new group following an amalgamation, until varied or discharged in accordance with the terms of the deed. 

In addition to receiving acceptances to take CPPIB’s holding to 40%, the takeover offer is conditional on separate approval being obtained from AIAL shareholders to CPPIB holding less than 50% of AIAL. An approval form will be sent to shareholders with the offer document. The takeover offer is also conditional on Overseas Investment (OIO) approval being obtained. To the extent that CPPIB receives acceptances that would take its holding above 40%, acceptances will be subject to pro rata uptake. Any dividends paid by AIAL after the date of this announcement will reduce the offer price per share by the dividend amount. 

The takeover offer is expected to be mailed to shareholders on or about December 14 and will remain open for a period of 90 days. 

As soon as possible after a successful completion of the takeover offer, CPPIB will take all reasonable steps to ensure that an amalgamation proposal is placed in front of AIAL shareholders. Two wholly-owned subsidiaries of CPPIB, NZ Airport NC Limited (which will be the offeror under the partial takeover) and NZ Airport HCP Limited have, at meetings of their shareholders, resolved to pursue the amalgamation under which they will issue stapled securities on the indicative terms described below. 

Another wholly-owned CPPIB subsidiary, NZ Airport HC Limited has resolved to participate in the proposed amalgamation as the company into which AIAL will be amalgamated. 

Under the proposed amalgamation, remaining AIAL shareholders will receive for each AIAL share cash and a stapled security comprised of a share and a convertible note. The indicative amalgamation consideration will have a total value of $3.6555 per AIAL share. The indicative components of that consideration are a convertible note with a face value of $3.35, an ordinary share with an issue price of $0.1055 and cash of $0.20 (less the amount of any dividends paid prior to the amalgamation). 

The stapled security structure will allow the new airport group to pay out a higher yield than AIAL has previously been able to, with returns being realised by way of interest, convertible note redemptions and/or unimputed dividends. CPPIB anticipates that the first year yield would be approximately 7.0%-7.5%, compared with a current fully imputed yield on AIAL shares of 2.7%. 

The new optimised capital structure with stapled securities will also provide an opportunity for ongoing liquidity through continued public markets listings. An application will be made to list the stapled securities on the NZX and ASX. 

“The structure we are proposing under the amalgamation provides for ongoing balance sheet efficiency. The stapled security structure will allow the new group to pay out a higher yield than is currently possible. 

The optimised capital structure will enable the new group to maintain its leverage at efficient and sustainable levels, similar to those used to finance other leading infrastructure companies worldwide. And, it will also allow AIAL to meet all of its capital expansion needs” said Mr. Wiseman. 

A new bank debt structure will be put in place at the time of the proposed amalgamation. Gearing will increase only to the extent that cashflows of the business grow to support it. The proposed bank debt structure has been extensively reviewed by Standard & Poor’s and has received an indicative rating of BBB- (stable), which is investment grade. The initial external net debt to enterprise value will be a modest 23% and CPPIB does not expect this to exceed 40% over the long term. These debt levels are lower than those of many Australian airport companies. 

Like many other infrastructure assets, under the proposed amalgamation structure, the senior bank debt will be secured by a ring fence security structure. The ring fence structure will result in a lower overall cost of capital, therefore allowing for both immediate and increased future returns for shareholders. 

The proposed amalgamation will be conditional on all necessary shareholder approvals being obtained, a favourable Inland Revenue Department (IRD) ruling and OIO approval. 

Mr. Wiseman said the amalgamation proposal has taken into account the outcomes of Manukau City Council and Auckland City Council’s respective public consultation processes. In particular, the proposal fully accommodates the councils’ stated desires to retain their proportionate stakes, should they wish to maintain them. 

Directors nominated by CPPIB to the board of the new company following the proposed amalgamation will include CPPIB’s Vice President – Head of Infrastructure, Graeme Bevans, a seasoned director with extensive airport experience, including overseeing the acquisition of increased shareholdings in and asset management of investments in Melbourne Airport, Brisbane Airport, Northern Territory Airport and stakes in Perth and Adelaide Airports. The remaining two CPPIB nominated directors will likely be a world-class, experienced director with relevant aeronautical or airport expertise and a prominent New Zealand director. 

“The CPPIB team possesses a wealth of infrastructure experience, including specific airport experience, that we believe would enhance AIAL’s existing expertise by providing international scope and opportunities for future strategic partnerships,” said Mr. Wiseman. 

Mr. Wiseman concluded, “Our investment horizon for infrastructure assets such as Auckland Airport is upwards of 25 years, which allows us to balance multiple stakeholder interests and commit to long-term sustainability and growth. Through our partial takeover and proposed amalgamation strategy, we will work with management to provide ongoing support for the airport’s long-term Master Plan and continued investment to improve the Airport’s physical assets by initially focusing improvements on property development, route development and retail offerings.”

About CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. As at September 30, 2007, the CPP Fund was C$121.3 billion (NZ$165.9 billion) of which C$2.5 billion (NZ$3.4 billion) represents infrastructure investments. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. 

Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. 

UBS has acted as financial advisor and Bell Gully has acted as legal advisor to CPPIB.

For further information contact:

Joel Kranc
Manager

Communications


(416) 874-5163

jkranc@cppib.ca

November 16, 2007

Offer price of $3.6555 per share, represents a premium of 37% over AIAL’s trading price just prior to pre-takeover speculation in May 2007.

AUCKLAND, NZ (November 16, 2007): The Canada Pension Plan Investment Board (CPPIB) today announced details of a partial takeover offer for Auckland International Airport Limited (AIAL) shares. The all-cash partial takeover offer will offer shareholders consideration of $3.6555 per AIAL share, which represents a value of 22.2x Auckland International Airport Limited’s FY2007 EBITDA. 

If successful, the offer will increase CPPIB’s shareholding in AIAL to 40%. CPPIB would then look to take all reasonable steps within its control to ensure that, as soon as practicable after completion of the offer, a CPPIB-led amalgamation proposal will be presented to all AIAL shareholders. 

Mark Wiseman, Senior Vice President - Private Investments for CPPIB said, “The price that CPPIB is offering to AIAL shareholders is a premium of 37% over the company’s trading price just prior to pre-takeover speculation.” 

“This offer is highly attractive for shareholders when compared to AIAL’s past trading prices, transaction and trading multiples and analyst valuations. We are confident that shareholders will recognise the value in this offer and accept it. 

“Should we achieve our objective of acquiring 40% of the shares, we will work with other shareholders to maximise the long-term value of the AIAL business. We intend to introduce additional international airport expertise to the Board, and will present an amalgamation proposal to the Board that, if successful, will result in a new optimised capital structure to benefit all AIAL stakeholders.” 

CPPIB believes that the partial takeover offer is the best result for AIAL shareholders following a lengthy, comprehensive process during which numerous parties have approached AIAL. CPPIB initially approached AIAL in June, subsequently undertook detailed due diligence, and has had comprehensive discussions with the management and Board of the company. 

In order to comply with certain Canadian regulations governing its investments, CPPIB will enter into a deed limiting its votes on resolutions to elect Directors to 30% of the votes able to be cast. That deed will apply to CPPIB’s holding in AIAL and to its holding in any new group following an amalgamation, until varied or discharged in accordance with the terms of the deed. 

In addition to receiving acceptances to take CPPIB’s holding to 40%, the takeover offer is conditional on separate approval being obtained from AIAL shareholders to CPPIB holding less than 50% of AIAL. An approval form will be sent to shareholders with the offer document. The takeover offer is also conditional on Overseas Investment (OIO) approval being obtained. To the extent that CPPIB receives acceptances that would take its holding above 40%, acceptances will be subject to pro rata uptake. Any dividends paid by AIAL after the date of this announcement will reduce the offer price per share by the dividend amount. 

The takeover offer is expected to be mailed to shareholders on or about December 14 and will remain open for a period of 90 days. 

As soon as possible after a successful completion of the takeover offer, CPPIB will take all reasonable steps to ensure that an amalgamation proposal is placed in front of AIAL shareholders. Two wholly-owned subsidiaries of CPPIB, NZ Airport NC Limited (which will be the offeror under the partial takeover) and NZ Airport HCP Limited have, at meetings of their shareholders, resolved to pursue the amalgamation under which they will issue stapled securities on the indicative terms described below. 

Another wholly-owned CPPIB subsidiary, NZ Airport HC Limited has resolved to participate in the proposed amalgamation as the company into which AIAL will be amalgamated. 

Under the proposed amalgamation, remaining AIAL shareholders will receive for each AIAL share cash and a stapled security comprised of a share and a convertible note. The indicative amalgamation consideration will have a total value of $3.6555 per AIAL share. The indicative components of that consideration are a convertible note with a face value of $3.35, an ordinary share with an issue price of $0.1055 and cash of $0.20 (less the amount of any dividends paid prior to the amalgamation). 

The stapled security structure will allow the new airport group to pay out a higher yield than AIAL has previously been able to, with returns being realised by way of interest, convertible note redemptions and/or unimputed dividends. CPPIB anticipates that the first year yield would be approximately 7.0%-7.5%, compared with a current fully imputed yield on AIAL shares of 2.7%. 

The new optimised capital structure with stapled securities will also provide an opportunity for ongoing liquidity through continued public markets listings. An application will be made to list the stapled securities on the NZX and ASX. 

“The structure we are proposing under the amalgamation provides for ongoing balance sheet efficiency. The stapled security structure will allow the new group to pay out a higher yield than is currently possible. 

The optimised capital structure will enable the new group to maintain its leverage at efficient and sustainable levels, similar to those used to finance other leading infrastructure companies worldwide. And, it will also allow AIAL to meet all of its capital expansion needs” said Mr. Wiseman. 

A new bank debt structure will be put in place at the time of the proposed amalgamation. Gearing will increase only to the extent that cashflows of the business grow to support it. The proposed bank debt structure has been extensively reviewed by Standard & Poor’s and has received an indicative rating of BBB- (stable), which is investment grade. The initial external net debt to enterprise value will be a modest 23% and CPPIB does not expect this to exceed 40% over the long term. These debt levels are lower than those of many Australian airport companies. 

Like many other infrastructure assets, under the proposed amalgamation structure, the senior bank debt will be secured by a ring fence security structure. The ring fence structure will result in a lower overall cost of capital, therefore allowing for both immediate and increased future returns for shareholders. 

The proposed amalgamation will be conditional on all necessary shareholder approvals being obtained, a favourable Inland Revenue Department (IRD) ruling and OIO approval. 

Mr. Wiseman said the amalgamation proposal has taken into account the outcomes of Manukau City Council and Auckland City Council’s respective public consultation processes. In particular, the proposal fully accommodates the councils’ stated desires to retain their proportionate stakes, should they wish to maintain them. 

Directors nominated by CPPIB to the board of the new company following the proposed amalgamation will include CPPIB’s Vice President - Head of Infrastructure, Graeme Bevans, a seasoned director with extensive airport experience, including overseeing the acquisition of increased shareholdings in and asset management of investments in Melbourne Airport, Brisbane Airport, Northern Territory Airport and stakes in Perth and Adelaide Airports. The remaining two CPPIB nominated directors will likely be a world-class, experienced director with relevant aeronautical or airport expertise and a prominent New Zealand director. 

“The CPPIB team possesses a wealth of infrastructure experience, including specific airport experience, that we believe would enhance AIAL’s existing expertise by providing international scope and opportunities for future strategic partnerships,” said Mr. Wiseman. 

Mr. Wiseman concluded, “Our investment horizon for infrastructure assets such as Auckland Airport is upwards of 25 years, which allows us to balance multiple stakeholder interests and commit to long-term sustainability and growth. Through our partial takeover and proposed amalgamation strategy, we will work with management to provide ongoing support for the airport’s long-term Master Plan and continued investment to improve the Airport’s physical assets by initially focusing improvements on property development, route development and retail offerings.”

About CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. As at September 30, 2007, the CPP Fund was C$121.3 billion (NZ$165.9 billion) of which C$2.5 billion (NZ$3.4 billion) represents infrastructure investments. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. 

Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. 

UBS has acted as financial advisor and Bell Gully has acted as legal advisor to CPPIB.

For further information contact:

Joel Kranc
Manager

Communications


(416) 874-5163

jkranc@cppib.ca

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