Dealmakers in the infrastructure sector are keeping close watch on AustralianSuper, with the group hinting it could be in the mix to compete for the $2bn portfolio of telecommunications towers owned by Singtel’s Optus while also taking on a larger slice of Sydney toll-road project WestConnex.
AustralianSuper chief investment officer Mark Delaney said the $220bn fund was looking at the upcoming sale of the Optus towers in the wake of the successful sale of Telstra’s towers to a Future Fund and Morrison & Co Consortium for $2.8bn.
Various consortiums have put in first-round offers for a 70 per cent stake in the Optus tower portfolio, with a shortlist of bidders in the Bank of America-run contest due out any day.
The portfolio is being strongly contested at a time when mergers and acquisition activity is booming in the Australian infrastructure market amid a low interest rate environment.
AustralianSuper has an interest in that auction as it looks to offload a stake of 16 per cent – and potentially more – in NSW electricity distributor Ausgrid through Barrenjoey Capital and Jefferies, in a deal that could top $2bn.
The superannuation giant, which runs the nation’s biggest fund, owns a 25.2 per cent share of Ausgrid.
It will consider a sale leaving it with just over 10 per cent through a direct stake and via IFM Investors, in which it is the biggest owner.
Asked on Monday why AustralianSuper was selling down its stake in Ausgrid, Mr Delaney said the fund was looking at expanding its stake in the 33km WestConnex – the nation’s largest infrastructure project – with plans by the NSW government to sell its remaining stake of 49 per cent.
AustralianSuper has been in the competition with Transurban as part of a consortium that purchased the 51 per cent share in the Sydney toll-road project for $9.26bn in 2018.
However, this time it is thought that consortium member Canada Pension Plan Investment Board may not be involved, paving the way for AustralianSuper to take a larger stake.
From the last deal, AustralianSuper has a 25 per cent interest and the existing owners have the first right of refusal on the remaining stake.
Mr Delaney said owning a stake in Ausgrid, NSW Ports and an increased exposure to WestConnex would be too much for the fund in Sydney alone.
He said AustralianSuper had yet to decide whether it would be selling part or all of its stake in Ausgrid, which it bought in 2016 along with industry fund investment vehicle IFM.
This was when investors from China and Hong Kong were ruled out of the race at the last minute.
Mr Delaney said AustralianSuper had a good relationship with Transurban where it was prepared to buy some assets off it to allow it to redeploy capital in new assets.
Transurban has also sold some of its toll roads in the US to AustralianSuper to free up its balance sheet.
- Additional reporting by Bridget Carter
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