Council votes against airport bid proposal

Auckland City Council today decided to vote against the bid made by the Canadian Pension Plan Investment Board (CPPIB) to purchase a 40 per cent stake in Auckland International Airport Limited (AIAL).

The council had already voted against selling its 12.75 per cent shareholding in the airport at its meeting on 28 February 2008 as per the council's Auckland Airport shares policy.

In making its decision to object to CPPIB's proposal, the council considered the merits of the proposal against the objectives and criteria in its airport shares policy

It reviewed the recommendation of the airport board along with the Independent Adviser's Report by Grant Samuel and recent government announcements on changes to tax laws and overseas investment.

The council also considered a range of other relevant factors including the likelihood of a future proposal which may better meet its objectives.

Mayor of Auckland city, Hon. John Banks said: "On balance, in the medium to long term, we believe Auckland City Council will have a better chance of getting the most out of our investment in Auckland Airport without CPPIB holding a 40 per cent stake.

"We are looking at many different ways to enhance our returns and fund the things we do in the city – an increased return on our airport shares is one of these ways.

"Regardless of the outcome of CPPIB's partial takeover offer, the council will work constructively with the airport board and other stakeholders to maximise the return from our investment in AIAL for the benefit of residents and ratepayers of Auckland.

"However, we must give the board time to focus on the business and to develop a credible plan for improving returns to shareholders taking into account recent events. We look forward to seeing progress by the next Annual General Meeting."

Auckland City Council will lodge its objection to the CPPIB proposal prior to the offer closing at 5pm on Thursday 13 March.