KEY POINTS:
Auckland International Airport Ltd (AIAL) and Dubai Aerospace Enterprise (DAE) say they have terminated their merger agreement for the airport.
The two companies said today that, in light of circumstances, they had no alternative but to terminate the merger implementation agreement on a mutually acceptable basis, including that
each party bears its own costs.
A brief statement said DAE regretted that, notwithstanding the best efforts of the AIAL board, the transaction could not proceed in the form proposed.
DAE Airports chief executive officer Kjeld Binger said: "DAE regrets that the opportunity to do business with AIAL did not eventuate on this occasion and wishes (AIAL chairman) John Maasland and his team at AIAL well."
Neither company would comment further , the statement said.
In July state-backed DAE offered to buy between 51 per cent and 60 per cent of AIAL, in a $2.6 billion offer.
The deal needed the backing of 75 per cent of shareholders, and was to have been voted on in November after the local body elections.
Key shareholdings include Manukau City Council's 10.05 per cent and Auckland City Council's 12.75 per cent, while the New Zealand Superannuation Fund and Infratil own 6.2 per cent between them.
AIAL's directors had unanimously recommended the DAE proposal.
Mr Maasland said the board believed DAE could help the progress of the airport's strategy, particularly relating to new airport investment opportunities.
But last Friday DAE said legal proceedings filed by Air New Zealand over Auckland airport's landing charges constituted a "prescribed occurrence" under the terms of the merger agreement. Either party could terminate the agreement if they were unable to reach agreement within five working days.
AIAL disputed the existence of a "prescribed occurrence".
DAE also claimed that AIAL was in material breach of the agreement as it had not used its best endeavours to ensure a successful outcome to the proposal.
AIAL also disputed that claim.
A source, described as well-placed, said DAE did not intend to abandon its bid for AIAL, rather it wanted to make a cash offer if it succeeded in killing the proposal that was, in fact, terminated today.
On Monday Canada's second-biggest pension fund revealed it had seen AIAL's books and would soon make a "proposal".
The CPP Investment Board (CPPIB) made it clear it did not need control, council shareholders would not be diluted and the company could stay listed.
CPPIB said it intended submitting a proposal under which it would acquire up to 49 per cent of AIAL.
- NZPA
