GAP closes on MAp's flight plan

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This was published 14 years ago

GAP closes on MAp's flight plan

By Danny John and Jamie Freed

MACQUARIE Group's $345 million plan to cuts its management ties with its listed airport fund was under threat last night from a rival consortium in a dispute which could trigger a full-blown battle for control.

The counter proposal - launched by a specially-created company, Global Airports (GAP), headed by infrastructure specialist and AFL chairman Mike Fitzpatrick - envisages that the buy-out fee to be paid by Macquarie Airports to its one-time parent be split instead between itself and MAp's investors.

GAP approached the independent directors of MAp with its offer 10 days ago, a move that was subsequently rejected on September 14 in an email to Mr Fitzpatrick from Trevor Gerber, the chairman of the airport company's manager, MAML (Macquarie Airports Management Ltd).

GAP, which says it will cap any money it receives from MAp at $100 million, made a second attempt last Friday to negotiate with Mr Gerber but that was formally rejected yesterday by the boards of both MAp and MAML.

It is believed that Mr Fitzpatrick, the founder and former chief executive of Hastings Fund Management, and his team of airport managers will now go direct to the fund's investors to seek support for their bid.

"We believe the benefits of the GAP proposal are compelling to MAp security holders and the independent directors of MAp have a duty to allow it to be considered by MAp security holders,'' Mr Fitzpatrick said in a statement.

Their offer was not disclosed last week to the ASX, or to MAp's security holders, despite concerns about the importance of the proposal. MAp's shares rose nearly 9 per cent from $2.42 on September 14 to Friday's close of $2.63.

Mr Gerber told Mr Fitzpatrick that the independent directors could not support his move because it could trigger a change of control over the fund with too many uncertainties and risks for MAp's investors.

The directors also reiterated their support for Macquarie Group's plan which is to be voted upon by MAp's investors next week. If accepted, the current MAp management team which is employed directly by Macquarie, will switch in-house.

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This will leave Macquarie as just a shareholder in MAp, albeit a significant one, with 22 per cent.

MAp's main asset is its majority shareholding in Sydney Airport but it also owns sizeable holdings in European gateways at Brussels and Copenhagen.

MAp has argued it needs Macquarie's co-operation in any management transition because the switch would trigger change of control provisions that could make it more difficult to refinance $4 billion of debt, among other issues.

A source close to the independent directors of MAp said the board would abide by the decisions taken by its institutional shareholder base on September 30.

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''There always has been the option to [vote] out Macquarie,'' the source said. ''You can do that without these [GAP] people.''

The management team, including chief executive Kerrie Mather, is likely to stay with the company even if Macquarie was removed as the responsible entity at a lower cost than what was being proposed by GAP.

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