AustralianSuper or any other bidders considering another offer for New Zealand-based Infratil will no doubt have the cost of management fees due to Morrison & Co in mind when they are crunching the numbers.
The $5bn Infratil counts Morrison & Co as its manager — it launched Infratil in 1994.
Morrison has a contract in place to manage Infratil for five years, and any buyer would need to pay out its management fee.
The fee paid was $NZ36.9m in 2020, according to its accounts, and $NZ24m in 2019. Some estimate that this could add up to at about $NZ200m to the cost of buying Infratil, not factoring in compensation to Morrison for additional fees it would receive for transactions.
For 2020, total fees received by Morrison from Infratil added up to at lease $NZ162.5m, including its International Portfolio Incentive Fee and $NZ$127.5m the previous year.
Canadian pension funds are likely bidders.
Some suggest that the assets could be too eclectic for another major infrastructure fund.
Infratil last week rejected a $5.1bn offer by AustralianSuper, the country’s largest super fund with $180bn of assets under management.
The Infratil board says the $NZ7.43 per share offer materially undervalues the assets, which include Vodafone New Zealand, Wellington International Airport and RetireAustralia.
It also holds positions in renewable energy companies including Trustpower, Longroad, Galileo Green Energy and Tilt Renewables.
The bid is at a 28 per cent premium to Infratil’s closing share price of $NZ5.80 on Friday December 4.
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