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Mon 3 Sep 2007 11:27 AM

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Canada teeing up Auckland airport bid

State-backed pension fund seeking up to 49% stake as Dubai's attempts to capture airport flounder.

Canada's state-backed pension fund said today it will seek up to 49% of New Zealand's Auckland International Airport as a rival Dubai-based deal looks set to fail.

Shares in Auckland airport, New Zealand's main international gateway, rose 1.3% following the approach from the Canada Pension Plan Investment Board (CPPIB), which could capture its target stake for around $1.3 billion at current prices.

The move by CPPIB comes after a rival bid from Dubai Aerospace Enterprise (DAE) for a controlling stake in Auckland airport was thrown into doubt when the state-owned aviation holding company said it may pull out.

DAE claimed on Friday the company that controls the airport had not done enough to ensure its NZ$2.6 billion ($1.8 billion) deal succeeds and was starting proceedings which could see the deal terminated this week.

Under the offer, which values the whole of Auckland Airport at NZ$5.6 billion, a new company will be created, in which DAE will have a stake of 51 to 60%.

The bid has met stiff opposition from New Zealand's government, as well as local residents and businesses.

Polls have shown as much as 90% public opposition to the Dubai proposal, and elected officials from both Auckland and Manaukau city councils, which together own 22.8% of the airport, have expressed concerns over foreign ownership.

The Auckland City Council is expected to formally decide to retain its 12.75% later today.

The country's trade minister Phil Goff said last month the government backed opposition to the sale of the 22.8% of the airport owned by local councils.

When contacted by ArabianBusiness.com DAE said it was unable to comment on whether it will continue with its bid as a five-day consultation process is currently under way.

 

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