KEY POINTS:
The Canadian pension fund's bid for a chunk of Auckland Airport is on track to get over its first hurdle, throwing heat on Government ministers who now appear likely to have to make the final call.
Last night, it was revealed that 62.5 per cent of shareholders are willing to sell their stake.
With that level of acceptance, the deal seems likely also to pass a separate vote in which half the airport's shareholders must approve it.
The leader of the Canada Pension Plan Investment Board's bid, Graeme Bevans, said the level of shareholder acceptance was "exceptional".
It came from a late surge in larger retail shareholders and near-uniform support from institutions.
He was confident the majority of shareholders who returned forms would be in favour of the deal.
"I'm not sure what the outcome will be but it's highly unlikely given the acceptance level that we would not succeed with the vote."
The Canadians needed acceptances from just under 40 per cent of shareholders in the $1.8 billion partial takeover, but as the sharemarket has slid, the December offer of $3.60 a share has grown more attractive.
The result of the vote is due to be revealed before the stock exchange opens this morning.
A "yes" vote by shareholders will turn the focus on Land Information Minister David Parker and Associate Finance Minister Clayton Cosgrove, who after taking advice from the Overseas Investment Office will make the final decision.
Last Monday, the ministers were given extra powers over foreign purchases of strategic assets in a surprise move by Finance Minister Michael Cullen.
Prime Minister Helen Clark said after the rule change she was personally worried about the airport falling into foreign hands.
About $300 million was wiped off the value of the company the next day by nervous investors who believed the bid was doomed.
But on Monday, the Canadians said they would restrict their voting rights to 24.9 per cent in a bid to placate the Government, and competition lawyers say the ministers would be hard-pressed to veto the deal on legal grounds.
The Government had hoped shareholders would reject the offer, avoiding the need for a tricky decision from the ministers.
The Canadian fund is amending its application to the Overseas Investment Office in light of the tougher rules, and hopes to make a formal submission next week.
Auckland and Manukau City Councils hold 23 per cent of the airport and this week opposed the bid.
Auckland City Mayor John Banks expects the Government to intervene to stop the Canadians, even if the deal "gets through the hoops and over the hurdles".
"I'd be very surprised if the Government makes these noises and backs down on this issue at this time of the electoral cycle," he said.
The Auckland International Airport board changed tack on the Canadian bid last month and recommended shareholders accept the offer but vote against it.
Chairman Tony Frankham last night said he would not comment on the shareholder acceptance level until results of the vote were revealed this morning.,
Although only small numbers of airport shares were traded yesterday, the price rocketed 35c to $2.54 as the Canadians closed in on the required acceptance level.
WHAT NEXT
* Results of the approval vote will be revealed before the NZX opens today.
* If the bid is approved by shareholders, it needs a Government ruling within 30 days.
* Associate Finance Minister Clayton Cosgrove and Land Information Minister David Parker will make the decision.
* If the ministers approve, shareholders will by April 18 be paid $3.60 a share, although this will be scaled back because of the high acceptance level.
* If the Government rejects the deal, the Canadian fund can seek a review by a High Court judge.
