The competition to buy up to 49 per cent of the WestConnex Sydney road project is moving forward, and one unknown is the intentions of the Canada Pension Plan Investment Board.
There are suggestions that CPPIB, which has $C497bn ($532bn) of assets under management, may be bowing out of the contest because of concerns about its exposure to toll roads.
The pension fund was among the Transurban-led consortium that purchased a 51 per cent interest in WestConnex in 2018 for $9.26bn. It got a 20.5 per cent stake, the same size as AustralianSuper’s.
Since then it has invested in a number of toll roads, including one in Indonesia and Transurban’s Chesapeake toll road in the Washington area.
As of 2019, offshore reports suggested it had about $C19bn invested in toll roads.
CPPIB had been expected to line up with Transurban and its partners, AustralianSuper and the Abu Dhabi Investment Authority, to bid for the remaining share of WestConnex. The consortium will probably still vie for the asset should CPPIB bow out, with another consortium member taking a larger holding.
The Transurban consortium is advised by Morgan Stanley, UBS and Barrenjoey Capital.
It will come up against IFM, which DataRoom tipped in December was working with Lazard in the auction, and its Dutch bidding partner APG.
The pair teamed up in the earlier contest to buy the 51 per cent WestConnex interest.
Royal Bank of Canada and Citi are working on the sale of the stake. An outcome is expected to be a couple of months away.
The NSW government is selling its 49 per cent stake in WestConnex in two tranches to create competitive tension in the auction. Each 24.5 per cent interest on offer is likely to sell for at least $4bn.
Registrations of interest were due in January and expressions of interest by the end of March.
One condition of the latest deal is that the underbidder will receive compensation for lobbing a bid.
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