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Battle for Auckland airport begins

Published: 9:47AM Monday July 23, 2007 Source: One News

A rich Arab company has fired the first shot in what analysts say will be a battle that will see our biggest and busiest airport under foreign ownership.

Dubai Aerospace Enterprise is offering more than $2.5 billion for a majority stake in Auckland International Airport.

Other bidders are now expected to come out of the woodwork.

"We are building up a portfolio of airports on a global basis," says Kjeld Binger, Chief Executive Officer of Dubai Aerospace Airports. "Now Auckland International is a cornerstone investment in this portfolio."

The wealthy company has been working hard to hammer out the multi-billion-dollar deal which would land it a majority stake of the publicly listed airport.

John Maasland, chairman of Auckland International Airport Ltd, is supporting the move.

"We're recommending this to shareholders in the absence of any other bid - in the absence of any other superior offer," he says.

But there is opposition.

Manukau City Mayor Barry Curtis, whose council owns a 10% shareholding, is not the only politician against it.

"(The airport) should not be allowed to be controlled offshore," says NZ First leader Winston Peters.

Airport users are also concerned, but likely to be placated by the newcomer's long-term vision.

"Airlines are our partners not our enemy and that's a very, very important part of our strategy in developing Auckland International Airport," says Binger.

There has been good news for 50,000 mum and dad investors since sale speculation began in May.  

The share price has climbed from just under $2.50 to $3.20 in mid June - hovering around the $3.30 mark for the last fortnight.

Analysts say there may be even more to come.
  
"Sit tight, it's still a great asset, it's worth a lot more than it was a month ago and you may not have seen the last of the play," says John Rowley from financial services company Macquarie New Zealand.

Shareholders have plenty of time to decide - voting on the proposal is not due until November.

Time enough, some analysts say, for other interested investors to put a more tempting offer on the table.

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