Dubai Aerospace Enterprise is seeking to buy a majority stake in New Zealand's Auckland International airport in a multi-billion-dollar deal supported by the airport's board.
Publicly traded Auckland International Airport (AIAL) says in a stock exchange announcement that its directors are unanimously recommending that shareholders agree to the deal, which would see the Dubai-headquartered aviation services company acquiring between 51% and 60% through new company Auckland Airport Ltd in a complicated transaction valued at up to NZ$2.6 billion ($2.1 billion).
The offer values New Zealand's largest airport at NZ$5.6 billion.
Under the proposal, shareholders would receive NZ$2.34 per share in cash as well as a new stapled security and a dividend of NZ$0.07 per share.
DAE will also create a "pool" of up to NZ$312.7 million for shareholders who would prefer to receive more cash but whose preference cannot immediately be met.
AIAL says the proposal effectively means DAE is offering up to NZ$3.80 per share, which represents a 15% premium over the closing price at the end of last week and a premium of more than 50% over the average trading price over a one-month period before 5 May, when takeover speculation first arose.
The proposal would see Auckland Airport remaining as a listed company on the New Zealand and Australian stock exchanges.
Its board would comprise seven directors, three of which would be appointed by DAE and four including an independent chairman from the existing board.
A co-operation agreement is also planned between DAE, which was established only last year, and Auckland Airport, under which DAE "confirms its commitment to enhance AIAL's existing business, and working with AIAL to pursue new opportunities beyond the existing airport site".
"We believe DAE will bring additional aviation and tourism development experience to the New Zealand business," says AIAL chairman John Maasland.
"This partnership should deliver significant benefits to the company and New Zealand tourism as a whole."
DAE chief executive Bob Johnson adds: "Auckland Airport Ltd will be a cornerstone investment for DAE and as such will receive our considerable support to continue to successfully develop the business on the global stage."
AIAL says its support for the proposed deal is conditional upon no superior proposal being made. It adds that it is also subject to 75% shareholder approval.
Shareholders are due to vote on the proposal in November. It will also require New Zealand Overseas Investment Office approval.
Source: Flight International