Incoming chief executive Jason Boyes dropped some heavy hints about where Infratil could invest next during the company's Investor Day, mentioning healthcare, data centres and fibre as "hot" areas.
With fibre, Boyes talked about an unnamed potential target with both sub-sea and terrestrial fibre and both retail and wholesale operations that could be split.
To some telco industry followers, that will sound very much like a description of ASX-listed Vocus Group, which has substantial fibre networks on both sides of the Tasman, as well as sub-sea fibre cables running up to Asia.
Vocus Group recently announced plans to spin-off and list its $722m NZ operation, which includes a nationwide fibre backbone network, as well as retail ISPs Orcon and Slingshot.
However, a potential spanner was thrown in the works on February 9 when Macquarie made a A$3.4b non-binding bid for Vocus as a whole. Australian business media reported that Infratil and Brookfield (who teamed to buy Vodafone NZ in 2019, were also potentially in the frame; both refused to comment).
The morning session also saw Infratil tighten its 2021 operating earnings guidance from a range of $430 million to $470m to $440m to $470m. The revised figure will include three months' earnings from a recent acquisition - Australian radiography chain Qscan.
Boyes took on the bulk of presentation duties during the first session of the Investor Day - an event that was moved online because of the Auckland Covid-19 lockdown.
The incoming CEO emphasised the continuity of investment philosophy. In terms of potential investment targets, he said a recent shift to technology infrastructure would continue.
Boyes said Infratil would build on its investments in CDC Data Centres (Canberra Data Centres) and Vodafone NZ, but he added: "What we've been looking at for some time at Infratil is 'How can we build on the beachhead we have with those investments?' And that's likely to be a separate investment from those assets.
"We've been looking at the fibre space - companies that have large on-land or sub-sea fibre networks - these businesses are really competitive as well, we've found, and it's a really hot investment space," Boyes said.
"We tend to look for market structures that give us comfort that those businesses will be able to reap the benefits from the massive growth in traffic we're seeing over their networks. And that was a key requirement of our investment in Vodafone last year. These investments tend to also come with large transformation programmes - whether that's creating a more efficient business, or separating retail from wholesale and focus on network services."
Boyes also focused on data centres - not surprisingly, given the runaway success of Infratil's 48 per cent investment in CDC in 2016, which is now easily its largest asset after a strong set of revaluations have seen the value of the stake rise from the initial $400m to the recently assessed $2.5b (which some analysts still see as under-played as CDC and its peers grow strongly in Australia, and the company begins its aggressive, $300m-plus data centre build in NZ - with its giant Hbosonville and Silverdale server farms already 80 per cent booked).
"We've spent a bit of time looking at global data centre opportunities. Clearly, that's an incredibly hot space with a lot of capital chasing the same number of investments. What we have started seeing overseas in much bigger markets is niches appearing in data centre markets where players who are specialising in particular types of data centres - things like high-performance computing or where customers have specific cooling or power needs - or edge computing where people need to be closer to a certain location."
It was possible Infratil would use a series of different development partners for different builds, in a similar fashion to Longroad Energy, Boyes said.
The incoming boss also highlighted Infratil's recent Qscan acquisition, saying healthcare had equal potential to renewable energy and technology infrastructure. More investments in the sector were being assessed by Morrison's staff, which now numbers some 150.
The background: Takeover target, CEO transition
The Investor Day comes on the heels of news that Marko Bogoievski - the longtime chief executive of both Infratil and its management company Morrison & Co - will stand down as Infratil CEO at the start of April.
Bogoievski will be replaced as Infratil boss by Boyes, a Morrison & Co veteran, who currently heads the investment bank's European operations. Boyes will also take Bogoievski's Infratil board seat (Bogoievski will remain on Morrison & Co's board).
The AustralianSuper bid comes at a time when the landscape is shifting, with Infratil considering the sale of Tilt Renewables (valued at just under $1b) and its half-share in Trustpower (worth around $1.3b).
Hint of a good price for Tilt stake
On Tilt, Bogoievski said during his opening remarks it was "difficult" to forecast where the opening-the-books process would end, "but we're now very confident of the likely outcome of that process. And we think it will demonstrate what we mean by upside potential."
Infratil shares closed Tuesday at $7.48 for a market cap of $5.4b.
The stock is up 36 per cent over the past year.
It slipped under $4 in March last year during the first lockdown but was already recovering before AustralianSuper's December offer caused a spike to the mid-$7s, where it has hovered since.
On the AusSuper buyout offer, Bogoievski said "The board responded appropriately and reasonably" by giving the Aussie fund's $3.4b offer the cold shoulder.
"We're prepared for further activity, but there's nothing on the horizon. In the meantime, our job is to run the business as normal."
Bogoievski recently said AusSuper wanted to buy what he described as "really sensitive assets in the New Zealand market - that we need to keep an eye on in all of our sensitive industries" - implying some kind of national interest defence could be mounted against the trans-Tasman preditor.
However, such a move could be contingent on turning a blind eye to Infratil's energy and retirement assets in Australia.