UPDATE 1-Canada fund to buy A$659mln stake in Transurban
(Recasts with CPP buying stake)
SYDNEY, June 19 (Reuters) - Canadian pension fund CPP Investment Board has agreed to buy a 10 percent stake in Australian toll road operator Transurban Group (TCL.AX) for A$659 million ($622 million), paying a premium to Transurban's last traded price.
Transurban said on Thursday it was aiming to raise up to A$1 billion through the share placement, a dividend underwriting and a share purchase plan, to fund its working capital needs and develop its road portfolios.
Transurban shares were placed on a trading halt ahead of the placeement, for which UBS is the lead manager.
CPP, which manages about $123 billion, earlier this year walked away from buying a stake in New Zealand's Auckland International Airport Ltd (AIA.NZ) after the New Zealand government rejected a $1.4 billion proposal.
CPP's stake in Transurban would go up to 14 percent following the placement, a company spokesman said, as the pension fund already has a 4 percent holding in Transurban.
Transurban, which owns the CityLink road in the southern city of Melbourne and the Hills M2 road in Sydney, said CPP would buy the stake at A$5.49 each but would not be eligible for a 29 per unit dividend announced by the company on Thursday.
Transurban Chief Executive Chris Lynch said the company would focus on cost reduction and pursue existing opportunities in the next 12 months.
"We have put the balance sheet on a stronger footing with greater flexibility and capacity to fund our project pipeline," he said.
For the full Transurban statement, see: here 1&u=urn:newsml:reuters.com:20080619:ASX_3A300283 ($1=A$1.06) (Reporting by Denny Thomas; editing by Jonathan Standing)
