CPPIB joins OTPP and exits Transurban for A$903m

The Canadian pension follows the Ontario Teachers’ Pension Plan Board a year later in selling its 12% stake in the Australian toll road operator. The Abu Dhabi Investment Authority is said to be one of the buyers.

Canadian pension fund Canada Pension Plan Investment Board (CPPIB) has sold its entire stake in Transurban, the Australian listed toll road operator announced in a statement today.

CPPIB sold its 12 percent stake in Transurban for A$903 million (€681 million; $980 million), or A$5.23 per share, a 2.4 percent discount to the toll road operator’s closing price last Friday, a source close to the deal said. The Australian media is reporting that the Abu Dhabi Investment Authority was set to pick up some 30 percent of the close to 173 million shares sold.

“Transurban understands that CPPIB has completed a block trade for its entire holding in Transurban,” the toll road operator said in a statement to the Australian Stock Exchange. The firm’s chief executive, Chris Lynch, added: “Transurban looks forward to working with those existing security holders that have taken the opportunity to increase their stakes and also understanding the views and aims of new security holders to the register.”

CPPIB has also issued a brief statement on the sale: “CPPIB monitors its investment holdings on a regular basis to determine the best allocation of our assets.  The sale of our shares in Transurban is part of our ongoing portfolio management.”

The Canadian pension’s exit from Transurban comes a little over a year after fellow Canadian pension Ontario Teachers’ Pension Plan Board (OTPP) dumped its entire 12 percent stake in the Australian firm for A$710 million.

The two Canadian pensions had repeatedly tried to buy Transurban over the course of 2009 and 2010. Their last bid for the company – filed together with Sydney-based investor CP2 – valued Transurban at A$7.2 billion last May. Transurban said at the time that the offer was too low. In May 2010, the three firms were shareholders in Transurban, owning close to 40 percent of the company.

Following the failed buyout, Transurban’s directors tried to patch up their frayed relationship with their largest shareholders, appointing Bob Officer, of CP2, as a non-executive director at the firm. Soon afterwards, CPPIB ended up acquiring Intoll, another Australian toll road operator, from Macquarie for A$3.4 billion.

OTPP agreed last week to an airport asset swap with Macquarie Airports that saw the pension divest its stake in Sydney airport in exchange for a 39 percent interest in Brussels Airport and a 30 percent interest in Copenhagen Airport, plus a cash payment of A$791 million.

As for CP2, the investor has offered A$2.2 billion to buy Australian toll road operator ConnectEast, which operates Melbourne’s EastLink motorway. The takeover bid has received the endorsement of ConnectEast’s independent directors. To read more about that transaction, please click here.