UBS was on Thursday night selling a stake of about $NZ800m in Auckland Airport on behalf of the Auckland Council.
A handful of industry and pension funds have been pre-allocated $300m worth of shares at $8.12 – a 3.8 per cent premium to their last closing price.
But a term sheet was also sent to investors on Thursday, where about 66.1 million shares worth $517m and representing 4.5 per cent of the company were being auctioned off in a book build at a price range of $NZ7.82 to $NZ8.20.
Following the sale, the council would retain 11 per cent in the airport.
The deal had been anticipated to happen after Auckland Airport’s result following a vote by the Auckland Council to sell down a 7 per cent interest, as earlier reported by DataRoom.
Shares on Thursday closed at $7.17.
The sale is part of the council’s move to pay down debt, and expectations earlier had been that shares would be sold at a discount of between 2 and 5 per cent to their last traded price.
Initially, Auckland Council Mayor Wayne Brown proposed to sell the council’s 18.09 per cent stake in Auckland Airport to pay down debt.
But after failing to gain councillor support for that proposal, it was changed to a partial sale of the council’s shares – 7 per cent – and it gained the approval needed to proceed.
Infrastructure investors had been targeted, such as NZ Super, Infratil and Macquarie Group.
Auckland Airport is listed in Australia with a $10.6bn market value, as well as in New Zealand, and has been on a roll in terms of share price performance with the resumption of travel since the pandemic.
Yet shares have slid from about $8.36 in May on expectations of the selldown.
A $NZ1.2bn raising in 2020 at the onset of the pandemic proved hugely popular when Citi, Jarden and Credit Suisse were involved.
For the year to June, Auckland Airport reported a $NZ148.1m underlying net profit as passenger numbers soared 183 per cent on the back of the global pandemic recovery.
It expects to generate underlying profit of between $NZ260m and $NZ280m for the 2024 financial year, with between $NZ1bn and $NZ1.4bn of capital spending.
Elsewhere, AMA Group was kept in a trading halt on Thursday as it launched an equity raising for about $60m through Canaccord.
The raise was first flagged by DataRoom in May.
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