November 07, 2007
General statement of intention from CPP Investment Board regarding Auckland International Airport Limited
CPP Investment Board gives shareholders the ability to assess CPPIB’s proposal for themselves
Auckland, NZ (November 7, 2007): The CPP Investment Board (CPPIB) today announced its intention to make a partial takeover offer to all shareholders of Auckland International Airport Limited (AIAL). If successful, the offer would increase CPPIB’s shareholding in AIAL to 40%, which CPPIB believes would then enable its amalgamation proposal to be put to shareholders for their consideration.
“In the past few days, we have received strong encouragement from AIAL shareholders that they would like the opportunity to consider our proposal directly. Like us, they believe that our proposal is one that is in the interests of all AIAL stakeholders. As a result, we have decided to take steps to enable CPPIB’s proposal to be put directly to shareholders,” said Mark Wiseman, Senior Vice President – Private Investments for CPPIB.
“CPPIB’s preferred course of action was for the AIAL Board to put our proposal in front of its shareholders. The step we are now taking in no way detracts from our desire to work with the Company and its management team to further the growth and development of the airport’s business,” Mr Wiseman said.
The AIAL Board decided on October 31 to cease discussions between CPPIB and AIAL, to reject the CPPIB proposal, thereby not disclosing all of the details of the proposal to shareholders for their consideration.
CPPIB maintains its desire to present its amalgamation proposal to AIAL shareholders and believes the most appropriate option to effect this is by doing the following:
· Making an all-cash partial takeover offer of NZ$3.6555 per share to take its holding to 40 per cent of the shares of AIAL. This cash offer reflects a 63% premium to the six month pre-takeover speculation VWAP (volume weighted average price) for AIAL shares. The price is equivalent to the $3.70 cash consideration option referred to in CPPIB’s announcement of 19 September, less the 4.45 cents per share dividend that was paid by AIAL on 19 October. As the offer will not result in CPPIB holding or controlling more than 50% of the voting rights in AIAL it will be subject to approval being obtained from AIAL shareholders in accordance with Rule 10(1)(b) of the Takeovers Code.
· CPPIB will take all reasonable steps within its control to ensure that as soon as possible after successful completion of the offer, the CPPIB amalgamation proposal will be placed in front of shareholders.
As soon as practicable, CPPIB expects to be able to give AIAL a formal takeover notice under the Takeovers Code. That notice will have attached to it the full terms and conditions (including a condition making the offer subject to approvals under the Overseas Investment Act and Regulations) of the proposed partial takeover offer.
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 June 30, 2007, the CPP fund was C$120.5 billion (NZ$167.4 billion). 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.
The Chief Actuary of Canada estimates that CPP contributions will exceed annual benefits paid through 2019, providing a 12-year period before a portion of the CPP Fund’s investment income is needed to help pay CPP benefits.
For further information contact:
Joel Kranc Manager
Communications CPP Investment Board