KEY POINTS:
The owner of Ports of Auckland wants a bigger slice of the proposed mega-merger with Port of Tauranga, now that it has won a battle to be the major New Zealand port for shipping giant Maersk.
Mike Lee, chairman of the Auckland Regional Council, which owns the port,
said the decision by the container shipping line to run most of its North Island services through the Ports of Auckland meant it should have a majority stake in the merger.
He said the Maersk decision "highlights the unacceptability" of reports that Ports of Auckland would own a third of the merged port.
Ports of Tauranga was expected to own a third, and private investors the remaining third.
Port of Tauranga chief executive Mark Cairns said Lee's comments were "unfortunate".
"Those are issues for the boards to work through."
Maersk said on Tuesday that Ports of Auckland would get the "significant share" of its North Island port calls. Tauranga would get some of its services.
Analysts have said that Maersk, which controls 38 per cent of the world's container market, was threatened by the merger proposal because it tipped the balance of negotiating power in favour of the ports.
The decision to go through Auckland was an attempt to destabilise the merger, the analysts said.
Port of Tauranga has said the decision would cost it $1 million a month.
Lee said the Maersk decision increased the value of Ports of Auckland and Auckland Regional Holdings, the ARC company that owns the ports.
"I would say that those values would have to be reflected in the shareholding of any new entity," he said.
"I don't think we could put Ports of Auckland in a minority situation ... It would be a majority share for the larger contributor."
Auckland Regional Holdings would be giving away value on an important wealth-generating asset if it took a minority stake, Lee said.
"We would go into a merger seeking to retain the real value of the Ports of Auckland, but at the same time we see the merits of inter-regional co-operation."
How much the win of the Maersk contract has added to the value of Ports of Auckland is unknown, as the price has not been disclosed.
But it is less than the $1 million a month in revenue that Port of Tauranga says it lost.
Cairns has said that the deal had to be a merger of equals.
The two ports were continuing to put effort into merger discussions and Maersk's decision was neutral to the merged business entity.
The ports were aiming for the merger to be completed in the first half of next year, and it was not a short-term strategy in the "face of one customer contract negotiation".
The Maersk decision to use Ports of Auckland as a hub underlined the need for port rationalisation, said Cairns.
Ports of Auckland chief executive Geoff Vazey refused to comment.
Goldman Sachs analyst Marcus Curley said the Maersk decision pushed up Ports of Auckland's value and decreased Ports of Tauranga's value.
"So by definition the ARC and Auckland Regional Holdings would have a larger percentage shareholding in the merger," said Curley.
The jump in value of the Ports of Auckland "amplified the view" that the port needed to be protected.
The chairman of Port of Tauranga majority owner Environment Bay of Plenty, John Cronin, could not be contacted yesterday.
