Giant Oz super fund makes $5b play for Infratil

Offer 28% premium to NZ company’s last share price

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 company, established by the late Lloyd Morrison and listed on the NZX in 1994, is owned mostly by institutional investors and ACC.

The proposal is a nonbinding 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 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.

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 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 ($21b) 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,” Kemp said in a statement.

“We believe our proposal, if implemented, would deliver an attractive premium for Infratil shareholders.”

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 current prices, the Tilt stake is worth more than $1b.

Infratil’s portfolio comprises a raft of prime New Zealand and Australian 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 a 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.

Matt Goodson, managing director of Salt Funds, said the attitude of Infratil’s managers Morrison and Co to the proposal would be interesting.

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.

“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.”

We see significant potential to invest in the growth of Infratil’s assets.

Nik Kemp, AustralianSuper