An independent study by consultancy KPMG has found that Macquarie Airports' (MAp) planned A$345 million ($294 million) payout to its parent to secure its independence is "fair and reasonable".
The operator of Sydney Airport announced plans in July to "internalise the management" of MAp by cutting ties with the Macquarie Group, Australia's largest investment bank. Macquarie would increase its stake in MAp to 27.3% but give up management control in return for A$345 million.
KPMG, which was hired by MAp's board to assess the plan, found that the fair value for the management rights was between A$320.6 million and A$400.6 million.
Shareholders, if they approve the move, will exchange a "variable payment, based on the Map security price and its relative performance...for a more certain payment reflecting salary costs and other operational costs," it says in its report.
While the A$345 million will be paid out of MAp's reserves, the company will raise capital to shore up its balance sheet.
"We are of the opinion that the internalisation is fair and reasonable," adds KPMG. "MAp will become a stand alone entity with management solely focused on MAp's airport investments.
The chairman of MAp's independent board committee, Trevor Gerber, says that the internalisation is a logical step to address a gap between the value of its airport investments and the security price. "MAp has reached a stage in its evolution where it makes sense to become a standalone entity," he adds.
A meeting to get its shareholders' nod for the decision and a change of name will be held in late September or early October. Apart from Australia's main gateway Sydney Airport, in which it has a 74% stake, MAp also owns shares in and operates airports in Copenhagen, Brussels and Bristol.
Its decision to break way from its parent comes after Macquarie decided earlier this year that its future was in moving away from publicly listed funds like MAp, which had fuelled its growth for several years.
Source: Air Transport Intelligence news
