KEY POINTS:
Airport bidder the Canada Pension Plan Investment Board (CPPIB) has today come up with a measure designed to keep their offer within foreign investment guidelines.
The latest Canadian move will further restrict its ability to vote its shares of Auckland International Airport if its partial takeover offer is
successful.
With four days left before the expiry of its offer, the CPPIB move is a late attempt to make its bid more palatable to the Government which is concerned about the sale of strategic assets and the level of control the Canadians would have over the airport company.
In a statement this morning the CPPIB said it will voluntarily reduce its voting power for all shareholder resolutions, with the exception of resolutions that affect the rights attaching to CPPIB's shares, to 24.9 per cent of all airport voting shares on issue.
CPP will also provide that the limitation to 24.9 per cent can only be relaxed or revoked by CPPIB if it is permitted by a New Zealand overseas investment law or regulatory approval to vote more than 24.9 per cent of the voting shares in the airport on issue.
The pension board says voluntary restrictions in relation to its voting rights reinforced the fact that CPPIB will not have control over AIAL in any respect.
Overseas Investment approval is required for overseas investors wishing to acquire 25 per cent or more of the shares in substantial companies or companies that have sensitive land.
In its December 14 offer document, the CPP said it would use up to 30 per cent of its votes to determine the makeuip of the airport board.
CPPIBs Vice President - Head of Infrastructure, Graeme Bevans, said CPPIB has carefully considered the amendment to the Overseas Investment Regulations announced by the Government last Monday.
"From the beginning, we have always said that we have not wanted control of Auckland Airport and we have been careful to structure our investment accordingly.
"However, now that the Overseas Investment regulations have changed, we have taken further initiatives to make absolutely clear we will not control the airport, even under the revised standards.
"Although CPP will have a 40 per cent economic stake in Auckland Airport if our offer is successful, the additional restrictions we have decided to put in place around limiting our voting rights to 24.9 per cent of all AIAL voting shares on issue will ensure that control of the airport even more visibly remains in the hands of the companys broad shareholder base, the vast majority of whom are New Zealanders."
Bevans said the company had always sought to be a long-term minority non-controlling investor in AIAL and their stake will assist New Zealanders in maintaining control of Auckland Airport.
"By bringing our global contacts and aeronautical expertise to the table, and by working alongside the airports management team and the directors on the Auckland Airport Board, we will also help to strengthen this key strategic asset for the benefit of all AIAL shareholders and New Zealand as a whole."
To effect these changes to the voting limitation, CPP will alter the voting limitation deed it entered into in December last year.
The only shareholder resolutions the 24.9 per cent limitation will not apply to are resolutions which affect the rights attaching to CPP shares in Auckland Airport - a very confined range of resolutions.
In early sharemarket trading today the airport's share price was down 6c to $2.22.