Dubai Aerospace Enterprise (DAE) is likely to sweeten the bid for Auckland airport even as the Dubai-based company is adopting a wait-and-watch attitude for the outcome of a legal tussle.
DAE said a legal challenge against Auckland Airport by Air New Zealand over landing charges breached the terms of its bid for a controlling stake and it was initiating talks that could see the offer terminated within five working days.
"We are keeping our options open and can wait for five days," Chief Executive Officer Bob Johnson yesterday told The Emirates Today.
Media reports said DAE's proposed $1.8 billion (Dh6.6bn) bid for Auckland International Airport looks set to fail after Dubai said the airport company had not done enough to ensure the agreed deal succeeds.
Shares in Auckland Airport fell as much as 6.6 per cent in early trade but later pared losses on hopes the dispute would open the way for a rival bid, or an improved offer from the Dubai-based company.
A Reuters report quoted Macquarie Equities research director Arthur Lim as saying that DAE might put up a revised all-cash bid to replace its current offer to head off potential rivals.
Johnson would not comment on a revised bid offer.
Shares in Auckland Airport fell to NZ$2.85, but recovered to end down two cents or 0.7 per cent at NZ$3.03.
The shares are trading well short of Dubai's NZ$3.80 per share cash and securities offer for 51 to 60 per cent of the company, reflecting the market's dim expectations of the bid succeeding amid political opposition.
New Zealand utilities investor Infratil announced earlier this month it had built up a 6.2 per cent stake in the airport in conjunction with the state pension fund, spark ing talk of a competing offer, while a Canadian pension fund has also made an approach for shares in New Zealand's main international gateway.
Other companies have looked at Auckland Airport, with the company saying one prospective bidder has conducted due diligence, but no counter-offer has emerged.
Lim said if Dubai Aerospace fronted with a NZ$3.60 cash bid, it would probably succeed in its bid to get control of the New Zealand Airport.
The current Dubai offer for a controlling stake is due to be voted on in November, requiring 75 per cent shareholder approval.
By Bashkar Raj
© Emirates Today 2007
