Canada’s CPP Investment Board is planning to make a formal bid for a sizeable minority stake in New Zealand’s Auckland International Airport, potentially unseating Dubai Aerospace Enterprise (DAE) as preferred bidder.

The pension plan investment board says in a statement issued by Auckland airport today that it “intends to submit a proposal under which it would acquire a significant minority stake in Auckland International Airport Limited (AIAL)”. It says it has “largely completed its due diligence and is currently considering its options regarding the specifics of a formal proposal”.

CPP Investment Board says its proposal would limit its stake to 49% and two city councils that hold shares in the airport would be able to keep their stakes. “Any CPP Investment Board proposal will involve the issue of new securities which will provide enhanced returns while preserving the investment grade rating of AIAL,” it adds.

“Our goal is to put forward a compelling proposal to AIAL that meets the interests of all stakeholders. Specifically, we aim to deliver significant value to AIAL shareholders, while preserving ongoing substantial levels of New Zealand ownership of the airport.

“We believe the structure we intend to propose will also help to facilitate future investment in the continued growth and development of AIAL. Moreover, we are committed to supporting the current management team, who we believe to be world class.” Publicly traded AIAL makes no comment on the planned bid by CPP Investment Board, which is based in Toronto and accountable to the Canadian Government.

In July AIAL said it was recommending that shareholders accept an offer from DAE covering the purchase of between 51% and 60%, although late last week the proposed deal appeared to be in jeopardy after DAE claimed AIAL had failed to take its “best endeavours to ensure a successful outcome to the proposal”. The DAE bid has been opposed by some politicians in New Zealand.

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Source: Flight Daily News

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