KEY POINTS:
So, Infratil's Lloyd Morrison has spoken.
For those who missed it, here is the abridged version. He's not planning his own bid for control. He doesn't mind the Canadians but doesn't like their current offer which he sees as a hostile bid for a controlling stake.
He doesn't
want to see any shareholder with a controlling stake, unless they are prepared to pay some serious dosh - more than $4 a share at least. He is pro-New Zealand ownership but he isn't anti foreign investment. He wants to bring in a cornerstone shareholder with a stake of less than 30 per cent to allow some sort of amalgamation and more efficient restructuring of capital. He thinks this should be done via a fresh sale process. And he is confident that there are other potential investors out there.
Oh yeah, and he does want to be involved in running the thing, at least at a board level. Well we knew that. He is standing for a seat at the AGM after all. So now shareholders know what to expect if they vote him on to the board.
As for the merits of letting him get involved, Morrison says he wants to be judged on his track record - which is pretty impressive to be sure. We didn't name him the Herald's business leader of the year in 2006 just because he's a natty dresser.
So in terms of keeping shareholders fully informed about their options its seems the biggest gaps remain to be filled in the Canada Pension Plan (CPPIB) story.
A number of market players have suggested they can't see how CPPIB will effect an amalgamation plan once they are already inside the company with a 40 per cent stake. Who will they amalgamate with?
CPPIB representatives were yesterday very keen to emphasise that they were not trying to be evasive by not outlining the details at this time.
All will be revealed in due course, they say. But takeover law requires that they have to dot the i's and cross the t's on the offer documents before they go out to shareholders. They are legally constrained in what the can say about their plans at this stage. But the point, they say, is that shareholders will get a comprehensive outline of the plans before they vote and/or opt to sell their shares into the offer.
CPPIB representatives have also drawn attention to a point first made in the Business Herald in September - which already feels like a lifetime ago in terms of this story.
That is that there is an an unusual clause in the CPPIB constitution.
Its investment regulations state: "The board shall not directly or indirectly invest in the securities of a corporation to which are attached more than 30 per cent of the votes that may be cast to elect the directors of the corporation." In other words, even if CPPIB takes a 40 per cent stake in the airport, it can only take up voting rights, with regard to appointing board members, equivalent to a 30 per cent stake.
It is an interesting point because it brings us back to one of Morrison's questions. Why do they need a 40 per cent holding? Particularly if they can't exercise voting powers on the board exceeding 30 per cent. A 40 per cent holding also falls outside the mandate that Manukau City has set itself for supporting any potential buyer. They don't want to see any one shareholder with a stake of more than 35 per cent. That could lose CPPIB the important support of a 10.05 per cent stake holder.
One possibility is that CPPIB doesn't plan to hold on to 40 per cent. It is plausible that while they may need a 40 per cent stake to force through their amalgamation plan - whatever that may be - they could look to sell down to about 30 per cent in the long term.
That's the kind of detail that might sweeten the deal for Manukau. Auckland City has shown support for the CPPIB bid. But without Manukau the numbers will be pretty tight.
Infratil and NZ Super Fund control about 8 per cent and New Zealand institutions like AMP Capital, ABN Amro Craigs and Brook Asset Management, between them, hold considerably more than that.
Remember, the Canadians need to get majority support from shareholders to proceed with the offer - not just 40 per cent acceptances.
So a lot depends on how much institutional support Morrison can muster. He has some heavyweight supporters who believe that if anyone can unite the business tribes of Aotearoa, he can.
* Liam Dann is Business Editor of the Herald.
