By Matt O'Sullivan
A Canadian pension fund has made a $3.47 billion bid for the toll road company Intoll, just six months after the so-called ''Good MIG'' was spun out of Macquarie Infrastructure Group. Shares leapt.
The Canada Pension Plan Investment Board has made an indicative offer to buy Intoll’s entire issued capital for $1.535 per security via a scheme of arrangement. Securityholders also have the option to roll over their holdings into an an unlisted investment vehicle.
Intoll shares jumped almost a third when they resumed trading, and ended the day up 33.5 cents, or 30 per cent, at $1.45.
Intoll’s chairman, Paul McClintock, said in a statement today that the toll road operator’s board had not formed a view on the offer and recommended that shareholders not to take any action.
Mr McClintock said Intoll and CPPIB had entered into a confidentiality agreement whereby the pension fund would be granted access to its data room over the next three weeks to allow it to conduct due diligence.
Fund managers speculated as recently as May that Intoll had become an attractive target since it was split from MIG in January and severed its management ties with Macquarie Group.
Intoll’s investments – the M7 motorway in Sydney and the 407-ETR in Toronto – has been viewed as high-quality roads which offer good growth potential.
The bulk of Intoll’s value rests in the Canadian toll road.
The offer from the Canadians is conditional on a number of items, including that Intoll directors unanimously recommended shareholders vote in favour of the offer.
Mr McClintock said there was no guarantee that the talks between Intoll and the Canadians would lead to a formal, non-binding offer.
Abu Dhabi’s sovereign wealth fund increased its stake in Intoll to nearly 9 per cent in May. It made the world’s largest sovereign wealth fund the third-biggest shareholder in the toll road operator after Macquarie Group (18 per cent) and Lazard Asset Management (11 per cent).
MIG’s chairman, Mark Johnson, made clear at a general meeting in January that splitting the toll road business in two could make one of the companies more attractive to potential bidders.
Under the split, the so-called ''bad'' MIG was renamed Macquarie Atlas Roads and retained Macquarie Group as its manager. Its investments include the M6 in Britain, the Autoroutes Paris-Rhin-Rhone in France, the Chicago Skyway, the Indiana Toll Road and the South Bay Expressway in San Diego.
mosullivan@smh.com.au