Canada’s Ontario Teachers’ Pension Plan (OTPP), a $118 billion pension fund, has agreed to acquire a circa 70 percent stake in Leighton Holdings’ telecommunications (telecom) assets, Leighton announced in a statement late last week.
Both parties had entered into exclusive negotiations for the sale of the assets in late February, in a deal valuing Leighton’s telecom business at A$885 million (€682 million; $913 million). Using that valuation, OTPP’s 70 percent stake would amount to an investment of A$619.5 million.
OTPP and Leighton will hold the assets through a joint venture structure, committing both to the partnership for a minimum of three years.
Both partners will have equal board representation in the joint venture and Leighton will be able to hold “customary board and shareholder voting rights in relation to material joint venture decisions” as long as it holds 20 percent or more of the partnership.
Leighton, a subsidiary of Spain’s ACS, has been shedding non-core assets to help reduce its debt. The telecom assets include Nextgen Networks – which operates a 17,000-kilometre fibre optic network across Australia – as well as Metronode and Infoplex – two data businesses. It is due to close later in mid-2013.
OTPP recently lost its head of infrastructure, Stephen Dowd, who had helmed the infrastructure business since 2008. A spokeswoman for OTPP previously declined to elaborate on the reasons behind Dowd’s departure.
Jane Rowe, senior vice president, private capital for OTPP, will assume the C$8.7 billion (€6.45 billion; $8.65 billion) infrastructure portfolio Dowd managed. The spokeswoman said the pension has yet to determine whether it will hire a replacement for Dowd.