The Canada Pension Plan Investment Board's (CPPIB) offer for a
partial takeover of Auckland International Airport has taken a blow
in a surprise move by the government.
The airport's board had recommended shareholders accept the offer,
but in a move overnight Monday the government closed a tax loophole
to prevent the Canadians getting tax breaks they were
expecting.
Business correspondent Roger Kerr says the Canadians were planning to restructure the company using stapled securities, which enables them to get a big tax deduction in interest payments to shareholders.
The move has come as no shock to the Auckland airport board.
"We've consistently said that the almagamation is not likely to succeed. And one of the reasons is that we believ the tax leak would just be too great for the government to be prepared to sustain," says board chairman Tony Frankham.
He says the CPPIB cannot withdraw its bid, which must proceed to the end of the offer period next month.
The Canada Pension Plan Investment Board (CPPIB) has offered $3.65 a share.
On Monday the airport board advised shareholders to sell to the
CPPIB, following significant changes in world market
conditions.
But Auckland airport's directors are divided on whether
shareholders should vote for or against the Canadians acquiring up
to 40% of the company.
