CPPIB completes due diligence on Intoll

Australian-listed toll road operator Intoll – a spin-off from the Macquarie Infrastructure Group (MIG) – said that the Canada Pension Plan Investment Board (CPPIB) has completed due diligence on it after spending a month in its data room.

The Canadian pension had presented a non-binding offer to Intoll in July valuing the company at A$1.535 (€1.057; $1.353) per share, or about A$5.1 billion, representing a 37.7 percent premium to Intoll’s share price prior to the bid.  Previously, CPPIB had said that its offer for Intoll equates to a multiple of 29 times Intoll’s estimated earnings before interest, tax, depreciation, and amortisation (EBITDA) for 2010.

With due diligence now completed, “the directors of Intoll remain in active discussions with CPPIB to determine whether an acceptable transaction can be agreed and put to security holders,” the Macquarie vehicle said in a statement. Intoll expects to make an announcement to its shareholders no later than August 27, when it will present its full-year results.

Intoll emerged from the division of MIG as the vehicle containing Macquarie’s less risky and more mature toll road assets:  Canada’s 407 ETR, in which it owns 30 percent, and Sydney’s Westlink M7, in which it has a 25 percent stake. MIG’s other roads – the UK’s M6, France’s APRR, the Chicago Skyway, the Indiana Toll Road and San Diego’s South Bay Expressway – were grouped into Macquarie Atlas Roads.

The toll road operator counts Macquarie (18 percent), Lazard Asset Management (11 percent), and Abu Dhabi Investment Authority (9 percent) as shareholders. Goldman Sachs is advising CPPIB on the deal with UBS advising Intoll.

In May this year, Australian-listed toll roads operator Transurban rejected a A$7.2 billion takeover bid from CPPIB, the Ontario Teachers’ Pension Plan Board and Australian investor CP2, saying the offer was too low.