NSW splits WestConnex stake sale in two

NSW throws curveball into $10bn sale of the remaining 49pc of Sydney’s WestConnex toll road, in bid to spark more bidders.

WestConnex road tunnels in Sydney. Picture: Jonathan Ng

The NSW government has thrown a curveball into the $10bn sale of the remaining 49 per cent stake in Sydney toll road WestConnex by splitting the deal in two in an effort to spark more bidders.

The sale will be split into two tranches selling equal 24.5 per cent stakes, as it seeks to “maximise competition”.

Transurban is the clear frontrunner given the consortium it fronts owns pre-emption rights after buying the original 51 per cent share in 2018.

A formal bid process for the first 24.5 per cent stake will start in the second quarter of 2021 once potential buyers have worked through registration and expression of interest phases. Sources expect the sale may be worth up to $10bn.

“The sale process has been designed to deliver a competitive process to achieve the best result for the people of NSW,” a NSW Treasury statement said.

The government sold the controlling 51 per cent stake for $9.26 billion in the 33km motorway to the Sydney Transport Partners consortium in 2018.

The STP consortium is owned by toll road giant Transurban, AustralianSuper, the Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority sovereign wealth fund.

The sale of a second tranche will then be kicked off, with the state open to selling to Sydney Transport Partners “or interested parties” through a competitive bid process.

Working on the sale are Royal Bank of Canada and Citi, and flyers are expected to be sent to prospective buyers at the end of November.

Transurban in 2018 beat a rival bid led by IFM Investors with Canadian pension fund OMERS and Dutch fund APG who may look to revive a consortium to bid for the remaining 49 per cent stake.

Overseas focused toll road operator Atlas Arteria is also tipped to show some interest along with local infrastructure investor Morrison & Co and Brookfield.

Transurban is in pole position, with chief executive Scott Charlton previously stating the Sydney-based company sees the 49 per cent stake among its growth options.

Still, the company gave away little in a statement on Monday.

“WestConnex is a vital part of Sydney’s transport network, with thousands of motorists saving around an hour each day and further stages still to come,” a Transurban spokeswoman said.

“While we note today’s announcement from the NSW Government, and will monitor further developments, our focus remains on operating our existing roads and delivering our current major road projects for Sydney.”