Future Fund snaps up EastLink stake

The Future Fund has snared an 19.8 per cent stake in EastLink. Picture: Wayne Taylor

The Future Fund has snared an 19.8 per cent stake in EastLink, putting to rest questions about the future ownership of the Melbourne toll road.

The deal was signed early last week, and is subject to other owners of the asset not wanting to take up the option to match Future Fund’s offer.

However, most believe it unlikely that other owners are buyers of more of the asset.

Selling the stake were NZ Super and TIAA.

It comes after a prolonged sale process was run for EastLink by RBC.

First round bids were received, but the process did not progress.

Earlier, Transurban was a keen buyer, but the Australian Competition & Consumer Commission objected to its ownership, promoting the sale process to be relaunched.

Earlier, expectations were that the sale of the stake would be far higher – as much as 55 per cent.

The asset is considered one of the best toll roads in Australia.

It is believed that QIC would manage the stake for the Future Fund, advised by Lazard.

Spanish toll road operator Abertis, advised by Citi and JPMorgan, had been working on a bid.

EastLink is a 39km toll road that connects the Eastern, Monash, Frankston and Peninsula Link freeways in the eastern suburbs of Melbourne.

It has nine shareholders, including NZ Super and Korean investors NPS and Mirae, which were earlier thought to be possible sellers.

The other investors are APG, USS, Denmark’s Arbejdsmarkedets Tillaegspension, Teachers Insurance, CIC and Annuity of the US.

The Melbourne toll road was bought by eight investors in 2011 for $2.2bn, after it cost $2.5bn to build.

Now it is thought to be worth between $3bn and $4bn.

The Mitcham-Frankston motorway links the Eastern Freeway in the eastern suburbs to the Frankston Freeway in the southeast.

For the 2022 financial year, it generated $60.45m in net profit and $319m in revenue.