After recently losing its bid to buy Auckland International Airport (AIAL) and having lost another bid earlier on this year, Dubai Aerospace Enterprise (DAE) has learnt what not to do, says the chief executive of the $15 billion (Dh55bn) company.
DAE dropped its $1.9bn (Dh6.9bn) bid last month for the Auckland airport, after several days of negotiations with the Auckland airport authorities and the New Zealand Government. In July, DAE had offered to buy up to 60 per cent of AIAL.
"Although Auckland airport's board was supportive, their shareholders were not. If there is a lesson here, we probably need to see through to the shareholders more clearly beforehand," Bob Johnson, CEO of DAE, told Emirates Today.
"The learning for us is to do some deeper homework and understand not to try and see through to the broader shareholder interest before we engage in a deal at that level as we did for Auckland airport. I think it was worth doing. And then as it turned out, it was worth stopping," he added. Earlier in the year, DAE's bid to acquire the aircraft leasing unit of Oaktree Capital Management, a $32bn (Dh117.5bn) Los Angeles buyout firm, had also fallen through. The DAE was one of the bidders for US leasing company Pegasus Aviation Finance, which is 90 per cent owned by private equity firm Oaktree Capital Management.
"Pegasus was not so much of a big deal but we were keen on Auckland bid and it fell off," said Johnson.
But the failure has not deterred DAE from looking out for more acquisition opportunities. "We probably have looked at up to 50 - but certainly more than 25 - different companies and opportunities to see if they meet our strategy and if they were available, besides the competitive issues that could affect the deal price, and so on," he said.
Explaining the actual reasons behind the failure of the Auckland bid, he said: "We ran into the country's political and local issues. And people in New Zealand had different views on the airport strategy beyond the board.
Airport chief quits
In a sudden move yesterday, DAE announced its CEO for the Airports business, Kjeld Binger, has resigned from the company.
The move comes close on the heels of DAE losing its bid for Auckland International Airport last month, in which Binger was actively involved.
DAE's spokesperson, Zarmineh Rab, said: "Kjeld Binger resigned as CEO of DAE Airports to pursue other endeavours elsewhere. Kjeld leaves the company on amicable terms." The company did not divulge a replacement for Binger at this stage.
By Shweta Jain
© Emirates Today 2007
