KEY POINTS:
A $6 million stoush over expenses Auckland International Airport says it racked up during a failed takeover bid by a Canadian pension fund is heading to court.
Action over takeover expenses is unusual, leading one market commentator to note that the Canada Pension Plan Investment Board stand was a clear sign it would not be back, even if a new government heralded a more favourable climate for infrastructure investment.
"It sends a signal that there are plenty of other fish to fry."
In dispute is the difference between what Auckland International Airport says it had sought - $7.6 million for expenses properly incurred - and what Canada Pension Plan Investment Board paid - $1.34 million.
CPP and its wholly owned New Zealand subsidiary NZ Airport NC said they had filed a statement of claim against Auckland International Airport in the High Court, seeking to resolve issues about the amounts that were recoverable.
The Takeovers Panel deals with about 20 takeovers a year and such a claim was extremely rare as companies usually sorted payment issues out themselves.
The pension board - which in March had investments worth C$122 billion - said it had twice sought clarification of issues and amounts to determine if they were properly incurred, after AIA issued a request for payment in early June.
That included requests for details relating to a $5 million payment to First NZ Capital and Credit Suisse as an incentive fee for the "takeover defence".
So far AIA had not provided the information sought, CPP said.
Auckland Airport said yesterday the fees were not paid to repel the offer but, in line with usual practice, were used to help the board assess it and pursue other potential buyers.
CPP also wanted to resolve through the High Court issues relating to the airport's refusal to release CPP from a confidentiality agreement which prohibited CPP from trading in Auckland Airport shares.
The airport said it considered that the expenses for which it had sought reimbursement were properly incurred and ought to be paid by CPP.
It also considered it had acted entirely reasonably and lawfully in relation to the confidentiality agreement between the parties at all times.
CPP's claims in relation to the confidentiality agreement included a damages claim which - based on AIA's share price at closing on Friday - was for about $2 million.
AIA said it would vigorously defend the claim brought by CPP.
In April government ministers vetoed the Canadian bid to take a near 40 per cent stake in the airport despite the Overseas Investment Office recommending that they allow the bid.
Graeme Bevans, CPPIB's vice-president and head of infrastructure, said he regretted having to take the actions. "CPPIB fully respects New Zealand laws and looks forward to these matters being resolved through the High Court proceedings."
This month Abano Healthcare settled a similar dispute over costs with Crescent Capital after the Australian investor failed in its takeover bid.
The two companies settled before a Takeovers Panel meeting about the issue after Abano had alleged it was owed about $603,000, about 80 per cent of the money it spent responding to Crescent's bid.
Auckland Airport shares were down 6c at $1.86c yesterday.
PARTING SHOT
* The Canadian bid for a 40 per cent stake of Auckland Airport was welcomed by shareholders but rejected by the Government this year.
* The airport says it incurred $7.6 million in expenses - the Canadians want to pay only $1.34 million.
