UPDATE 2-New suitor eyes Auckland Airport; shares surge
(Adds analyst comment)
WELLINGTON, Dec 21 (Reuters) - Auckland International Airport (AIA.NZ), which handles more than 70 percent of New Zealand's international air traffic, has had an expression of interest from a new potential bidder, rivalling a NZ$1.8 billion ($1.4 billion) offer from a Canadian pension fund.
The airport operator's shares jumped as much as 6 percent.
Auckland Airport said on Friday it signed a confidentiality agreement with the unnamed party and gave it preliminary access to its books to undertake due diligence.
Given the company has already seen one failed takeover this year and the Canadian bid is seen as facing an uphill struggle, the board would have been careful to make sure the potential bidder could put forward an attractive proposition, Macquarie Equities investment director Arthur Lim said.
"The party they are allowing to do due diligence would have to be a credible party that meets their criteria of either providing airport expertise or being prepared to make a full takeover bid," Lim said.
Analysts believe likely suitors would be airport operators such as Australia's Macquarie Airports (MAP.AX), or New Zealand utilities investor Infratil (IFT.NZ), both of whom already hold shares in the company.
Auckland Airport shares jumped to NZ$2.89 on the news, and last traded up 2.6 percent at NZ$2.79. The stock has gained 28 percent this year, compared to a 2 percent fall in the benchmark top 50 index .NZ50.
On Monday, the airport board said shareholders should reject Canada Pension Plan Investment Board's (CPPIB) offer of NZ$3.6555 a share for a stake of up to 40 percent in the company.
An independent adviser has estimated the company's value at between NZ$3.08 and NZ$3.47 a share, but Auckland Airport Chairman Tony Frankham said the board unanimously agreed the offer was too low, would raise debt levels and did not bring expertise in airport management.
The new potential bidder first emerged in November when advisers were looking for competing bids, the airport said.
The airport's sale is politically sensitive, with opponents arguing it would lead to foreign control of a strategic asset.
Frankham said on Friday the Canadian fund has waived a clause in its offer preventing the company from seeking competing bids. "Therefore we will begin a new process in early 2008 to seek a partner who better meets the criteria established by the board," he said in a statement.
Brokerage Citi on Thursday recommended shareholders accept the Canadian fund's offer, in the absence of a better proposal.
"We think the board concerns are valid, but our analysis suggests they are compensated for by the offer price," analyst Blair Cooper said in a note to clients. Continued...
