Australia's largest superannuation fund has made a takeover bid for New Zealand's Infratil, which owns half of Vodafone NZ, a majority stake in Wellington International Airport and local energy assets.
The offer from AustralianSuper values the NZX-listed infrastructure investor at $5.37 billion and is pitched at a $1.35 per share premium to Infratil's closing price on the NZX.
The proposal is a non-binding offer by way of a Scheme of Arrangement to acquire all shares in Infratil, with a component covering Infratil's majority holding in Trustpower.
The offer would leave Infratil's stake in Trustpower with the existing shareholders, paying $5.79 in cash and distributing 0.2210 Trustpower shares per Infratil share.
The offer represents a 28.1 per cent premium to Infratil's closing share price on Friday of $5.80.
The offer came after the NZX closed. But on the ASX, where Infratil is dual-listed, shares climbed 21 per cent to A$6.20 in their final hour of trading.
AustralianSuper said it believed that the proposal, if implemented, would unlock significant value for Infratil shareholders and that it "seeks engagement" with the Infratil board in relation to the proposal.
Representatives of Infratil, founded by the late Lloyd Morrison, were not available for comment to the Herald at press time.
AustralianSuper's head of Infrastructure, Nik Kemp, said AustralianSuper, one of the world's largest infrastructure investors with a A$20 billion global portfolio, was attracted to Infratil's high quality portfolio of infrastructure assets in New Zealand and Australia.
"AustralianSuper currently has NZ$1.3 billion invested in New Zealand, reflecting our long-term confidence in this market.
"As a well capitalised and long term investor, we see significant potential to invest in the growth of Infratil's assets over the long term on behalf of AustralianSuper's members, which allows us to provide significant value to Infratil shareholders today," Kemp said in a statement.
"We believe our proposal, if implemented, would deliver an attractive premium for Infratil shareholders," Kemp said.
AustralianSuper will continue to seek engagement with the Board of Infratil to afford
Infratil shareholders the opportunity to assess our proposal in full," Kemp said.
Separately Infratil, which is managed by Morrison and Co, has its stake in NZX-listed Australasian wind farm company, Tilt Renewables, up for review. At today's prices, the Tilt stake is worth more than $1 billion.
Infratil's portfolio comprises a raft of prime New Zealand and Australian and northern hemisphere infrastructure assets.
It has a 51 per cent shareholding in Trustpower, which owns and operates 22 hydro power stations.
The company last year was part of consortium that bought Vodafone New Zealand for $3.4b.
Infratil's latest half year result showed strong contributions from Vodafone NZ and Canberra-based CDC Data Centres.
Proportionate earnings before interest, tax, depreciation and changes in financial instruments (before incentive fees) of $229.5m in the six months to September.
This was up on the $204.2m in the previous corresponding period.
The results for the period were impacted by portfolio changes including the acquisition of Vodafone NZ in 2019, and the sale of Perth Energy, NZ Bus, and the ANU Student Accommodation business in 2019, among others.
The company has forecasted proportionate ebitdaf for the full year to March 2021 of between $430m and $470m, including an estimated $80m reduction caused by Covid-19 related restrictions, compared with $446m the previous year.
Infratil invests mostly in energy, transport and social infrastructure businesses.
"Within those sectors the priority is for companies that have an opportunity to grow so that if they are well managed they will be able to invest additional capital to improve earnings and valuations," the company's website says.
Matt Goodson, managing director of Salt Funds, said the attitude of Morrison and Co to the proposal would be interesting.
He added: "An independent report in a takeover situation will be complex, given Infratil's range of holdings."
Oliver Mander, chief executive of the New Zealand Shareholders Association, said that if the proposal goes ahead, it would mean another unwelcome delisting from an already thin local market.
"Like other investors, we are surprised by the offer," Mander said.
"Infratil is attractive both as an infrastructure investment and its exposure to green energy - its holdings in both (US wind and solar power company) Longroad and Tilt.
"Both positions are sought after by investors either as a defensive position or to reflect the current growth in demand for green energy worldwide," Mander said.
"The offer at first glance seems to be complicated by the distribution of Trustpower shares and by Infratil's recently announced review of its holding in Tilt Energy," he said.
"That may mean that further information may be required by retail investors and other shareholders."
Among its other assets, Infratil has significant commercial real estate portfolio, Australian retirement villages and a 40 per cent stake in Swiss green energy company Galileo.
Infratil was one of the worlds first listed infrastructure funds when it listed on the NZX in 1994. The company is owned by mostly institutional investors.