The NSW government is set to announce the winner of a $4bn-plus stake in Sydney’s WestConnex next Friday, as a Transurban-led consortium continues to shape up as the party to take the prize.
The NSW government had opted to sell its 49 per cent stake in the 33km motorway scheme 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.
Bids were due for the first tranche on Thursday September 9.
The Australian’s DataRoom column understands that the NSW government will not engage with bidders until the winner of the auction of the first tranche is announced, which is scheduled to happen on Friday September 17.
The proposals are understood to have been submitted fully documented, signed and unconditional.
Bids for the second tranche are understood to be due on Monday September 20, with the winner of that part of the auction announced the following day.
Transurban is believed to be bidding for both stakes in a consortium including AustralianSuper and the Abu Dhabi Investment Authority. It is known as Sydney Transport Partners.
The consortium is advised by Morgan Stanley, UBS and Barrenjoey Capital Partners.
A question mark continues to hang over IFM and its Dutch bidding partner APG, advised by Lazard, with suggestions earlier in the week that they were unlikely to put forward a proposal after earlier known to be in the race.
The situation begs the question as to whether there are any other parties in the contest.
The competition is advised by Citi and Royal Bank of Canada on behalf of the NSW state government and it kicked off this year.
Some have considered the outcome as likely to be predictable.
Transurban and its backers already own a 51 per cent stake in WestConnex which they purchased in 2018 for $9.26bn and have first right of refusal over the remaining interest.
The government does not, however, need to accept its proposal.
The Australian listed toll road giant, which owns almost all of the toll roads on Australia’s east coast, said in its recent results that the Australian Competition and Consumer Commission and the Foreign Investment Review Board had indicated they did not have any opposition towards the transaction.
Any other bidder in the competition is being offered the opportunity to have their bidding costs compensated in the order of about $50m.
In 2018, IFM took on Transurban and its consortium partners in the competition, but it is understood its bid was $2bn off the pace and many believed last year it was a surprise when it became known it was going to compete once again.
Should Transurban emerge as the successful suitor for WestConnex, as expected, it is likely to launch a $4bn-plus equity raising.
WestConnex is predominantly an underground Sydney motorway scheme, which is partially completed and has so far cost at least $16bn.
It creates 26km of new tunnels between Homebush and Kingsgrove, passing underneath Inner West suburbs.
The first of the tunnels opened to traffic in July 2019 and the second of the tunnels opened a year later.
The remaining tunnels are expected to open to traffic in 2023.
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