MACQUARIE GROUP significantly sweetened the buy-out of its management rights over Macquarie Airports yesterday, agreeing to write its $345 million fee down to zero if MAp incurred significant costs in renegotiating its debts.
The offer to indemnify MAp unitholders for any costs up to the full amount of the buy-out follows publicity of a rival proposal from a vehicle called Global Airports (GAP) that guaranteed to cap its internalisation fee at $100 million.
The increased indemnity for shareholders also addresses a key criticism raised by the proxy adviser RiskMetrics last week, which argued unitholders could pay the $345 million but not be protected from adverse consequences of debt renegotiations.
Last night MAp's lead independent director, Trevor Gerber, said he was confident the problems flagged by RiskMetrics would not eventuate, which would have the effect of Macquarie receiving the full $345 million. ''We absolutely believe that what we have put in place is effective in avoiding the change of control issues,'' he said.
But Mr Gerber said Macquarie's move to increase the indemnity gave unitholders comfort for the concerns they had been expressing, which focused on the possibility of large additional interest burdens from debt renegotiations at Copenhagen and Brussels airports triggered by a change of control.
The independent directors have argued the threat of renegotiating $4 billion in debt over Copenhagen and Brussels airports justifies the fee to Macquarie.
Michael Fitzpatrick, the head of GAP, said yesterday the secret debt documents used to justify the fee to Macquarie Group should be fully disclosed to MAp unitholders.
''Frankly, we find amazing your lack of interest in exploring an alternative proposal prospectively worth hundreds of millions of dollars to the security holders you represent, not to mention the overtones of personal abuse and condescension towards the GAP team in your letter,'' Mr Fitzpatrick wrote to the directors yesterday.
But Mr Gerber repeated his criticism of the approach as a ''job application'' and said the proposal ''had no merit''.
Yesterday Macquarie, the manager and major shareholder with a 22 per cent stake in MAp, rejected the approach as opportunistic.
''The individuals putting forward the alternative proposal hold no meaningful interest in MAp securities, are investing no personal funds … or taking on any risk,'' a spokesman said.
