Infratil backed in refusal to open books for takeover bid

AUCKLAND: The head of one of New Zealand’s wealth managers has backed Infratil’s refusal to open its books to AustralianSuper, calling the pension provider’s current takeover bid ‘‘insufficient’’.

Last week, AustralianSuper publicly revealed that it had made two approaches for Infratil, an infrastructure fund with assets ranging from clean energy to airports, the second valuing Infratil at around $5.4 billion. The offer sent Infratil’s shares surging above $7.

Infratil immediately hit back that the offer was not adequate and they did not expect further engagement at the current bid level.

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Wellingtonbased fund has come under pressure from some fund managers to discuss the bid with AustralianSuper further.

As the offer became public, stateowned fund manager ACC said the premium to Infratil’s recent share price made it worthwhile for Infratil’s board to engage with the Australians over the bid.

Other shareholders have said while the price offer may not be enough to reach a deal, Infratil should be open to talks.

Forsyth Barr managing director Neil PaviourSmith said it was clear that there had been a level of engagement between Infratil and AustralianSuper, but what the Australians wanted was for Infratil to open its books to allow due diligence.

‘‘I think at this stage the offer is insufficient,’’ Mr PaviourSmith said.

‘‘It’s good, in a way, that Aussie Super have highlighted the underlying value . . . The shareholders have benefited from the circumstances the company’s in, but the current price [being offered] is just too low.’’

Yesterday analysts at Forsyth Barr released a note raising its target price on Infratil to $7.70, above AustralianSuper’s offer price. The note outlined what its analysts saw as a range of likely scenarios which they said could result in Infratil’s shares being worth between $6.25 and $10.

Infratil had invested in communicating with its large base of retail investors, making it a popular holding among its clients, Mr PaviourSmith said.

‘‘The number one thing they do well is they deliver outstanding investment returns, which they’ve done over a long period of time. What your shareholders are ultimately looking for is a really good investment and Infratil has delivered that.’’

At the end of June, Infratil had delivered 19.1% compounding annual return over a decade, Mr PaviourSmith said. — The New Zealand Herald