Dubai Aerospace to buy Auckland Airport

Dubai Aerospace Enterprise (DAE), the Dubai-based aircraft leasing, financing, insurance, manufacturing and airport development major will acquire a controlling interest in Auckland International Airport, New Zealand's biggest aviation hub.

The directors of Auckland International Airport Ltd (AIAL) said they had unanimously approved DAE's offer worth NZ$2.6 billion (about $2.1 billion), which would mean it gains 51 to 60 per cent of the shareholding.

DAE will pay AIAL shareholders up to 3.80 New Zealand dollars a share in cash and securities, 49 NZ cents more than Friday's closing price on the New Zealand Stock Exchange and a premium of 55.9 per cent on the average trading price over the month prior to 5 May, when the price moved northward on takeover speculation. The offer values AIAL at NZ$5.6 billion.

Takeover rumours began when the Canada Pension Plan Investment Board offered the company's two biggest shareholders - the Auckland and Manukau city councils - NZ$3.10 a share for their 22.27 per cent holding.

They were interested in selling because returns at the airport were below expectations. The directors said they have recommended acceptance of the DAE offer, but the merger agreement allows them to opt out and accept a better offer if one materialises. Shareholders will vote on the merger proposal in November.

John Maasland, chairman of AIAL, said that DAE would bring additional aviation and tourism development experience to New Zealand, and the partnership would deliver significant benefits to the company, as well as tourism in New Zealand. The deal goes through only if approved by 75 percent of shareholders, and by the Overseas Investment Office.