Otago Daily Times

Infratil backed in refusal to open books for takeover bid

- HAMISH RUTHERFORD

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.

But

the

board

of

the

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

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