Investors Bought Shares To Block Acquisition

As ANN reported, discontent has grown since Dubai Aerospace Enterprise announced its intentions to acquire over 50% of Auckland International Airport in New Zealand.  Investors favoring New Zealand ownership recently bought enough shares to block the proposed acquisition.

Allowing a Middle Eastern company to control a major transportation hub for the country is something the US recently dealt with, as Congress stopped a Dubai-based company from acquiring several ports, despite backing from the Bush Administration.

Infratil, a utilities investor, and the New Zealand-owned Superannuation Fund, together own 6.2 percent of the Auckland airport, which is the nation's busiest. Combine this with the 23 percent stake owned by local government, and it may be enough to prevent Dubai Aerospace from gaining the 75 percent support it needs to acquire the airport, the International Herald Tribune reports.

Dubai's proposal -- which was recommended by Auckland Airport's board -- needs 75 percent approval from shareholders. Manukau City Council and Auckland City Council own more than a fifth of the stock... and according to the Tribune, have said they would prefer the airport to remain in New Zealand's control.

CEO of Infratil Lloyd Morrison told the Tribune there is "a strong business case" for New Zealand investments in Auckland Airport. Dubai, funded by the recent rally in crude oil, proposed injecting more money into the airport as part of its deal, which has run into opposition from several New Zealand lawmakers.

"We expect to be involved in considerably more discussion over what the optimal ownership, control, and capital structure of Auckland Airport should be," Morrison explained to the Tribune.

Infratil's intentions are unclear at the moment, as the company may work with Dubai and submit a revised plan to acquire the airport.

The chief executive of Dubai's airports unit, Kjeld Binger, said the airport investments are "a sign of confidence in the company, its future and the value we believe we can add," according to a statement sent to Bloomberg News. "We hope that all shareholders look at our proposal and judge it on its many merits."

FMI: www.dubaiaerospace.com, www.auckland-airport.co.nz/