KEY POINTS:
Infratil showed its hand last night, revealing itself to be one of the buyers that has been propping up the Auckland Airport share price for the past two days.
The Wellington-based infrastructure company - in partnership with the NZ Super Fund - has increased its stake by 1.25
per cent.
Between them the pair now hold at least 7.4 per cent.
Auckland International Airport shares plummeted on Wednesday after the Canada Pension Plan Investment Board proposal was knocked back by the board of directors.
But after an initial slump of about 20 per cent, they have held firm. Trading volumes remained high suggesting a keen buyer was in the mix.
That Infratil was buying shouldn't really surprise anyone. They were prepared to buy at above $3 in August when the Dubai Aerospace (DAE) bid was still live so why wouldn't they snap up shares at around $2.85?
But the news they are still active does add some spice to the airport ownership saga.
Infratil's Lloyd Morrison is already seeking a seat on the board and last night's notice will be a sign to investors that the airport is not about to drop out of play just because the Canadians have gone the way of DAE.
And there may also be others snapping up shares while the price is relatively low.
The likes of Macquarie may still be an outside chance. Who knows if they remain interested, but there is always a sense that they are watching proceedings and might look to move if they see an opportunity.
Having already done due diligence the Canadians aren't allowed to buy on-market, so there no obvious way back for them right now.
But there will also be plenty of shareholders out there holding on in the hope that there is still more to come in this long-running saga.
It is likely that the New Zealand institutions are buying in as overseas arbitrage funds pull out.
It would hardly be surprising, for example, if the likes of Simon Botherway and Brook Asset management have been buying.
At yesterday's close of $2.88 the Airport shares are well up for the year to date - 30 per cent up to be exact.
Compare that with a meagre 2.87 per cent for the NZX-50, which took another hit on global jitters yesterday, and it looks clear there is still a takeover premium in Auckland International Airport stock.
For those who read the fine print ...
Last night's SSH notice from Infratil to the stock exchange was confusing and takes a bit of decoding.
It declared that Infratil's outright stake - combined with shares it holds on behalf of NZ Super - now equals 6.25 per cent.
The market already knew they had 6.2 per cent, so what's the big deal?
Well the 6.25 per cent is not the same stake as 6.2 per cent that had already been declared to the market. On the basis of the earlier declaration it is safe to assume that Infratil and NZ Super now own at least 7.4 per cent between them.
Confused? Okay, lets take it step by step.
The previous notice from August - which indicated that Infratil and NZ Super held 6.2 per cent - included shares held for NZ Super by parties other than Infratil.
These shares were not included in yesterday's notice.
NZ Super has already indicated it had a stake of 1.19 per cent held on its behalf by parties other than Infratil.
So add that to yesterday's 6.25 per cent and you get 7.44 - at least. Who knows if NZ Super has had other parties actively buying in the past few days.
SkyCity's turn
The SkyCity board will no doubt have been watching the airport boardroom fracas very closely. The Manukau meltdown must be providing some lessons for them as they assess potential bidders for the casino company.
Given that First NZ Capital advises both companies it is unlikely that any lessons will be lost in translation.
The SkyCity board may eventually be faced with a similar big call to the one that split John Maasland, Mike Smith et al on the airport board.
They will have to decide if the offers on the table are worthy of putting in front of shareholders.
Given that market expectations are now high that a strong offer will be forthcoming, a low-ball offer would force the board to choose the lesser of two evils.
Should they put it before shareholders and risk the scorn of those who believe current management ought to be able to do better restructuring on the group on their own? Or do they send the private equity player packing and risk the scorn of those who now have little faith in management to restructure?
It was an extremely tough position for the airport and they at least have an asset that has been performing pretty well on its own.
Waiting for a bargain
It's hard to get away front the fact that SkyCity and Auckland Airport are the two most interesting corporate stories in the market right now.
The other contender this week was The Warehouse court battle.
But it was a bit of a letdown - largely because of the extent to which the juicy information has been deemed too commercially sensitive for public ears.
There is some hope in the market that there will be a decision before Christmas which could see the stock back in play sooner rather than later.
* Liam Dann is business editor of the Herald.
