Fundraising

OTPP exits Transurban

The Canadian pension is understood to have sold its 12% stake in Australian toll road operator Transurban for A$710m, following the latter’s recent rejection of a takeover bid submitted together with CPPIB and CP2.

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The Ontario Teachers’ Pension Plan Board (OTPP) has reportedly sold its 12 percent stake in Australian toll road operator Transurban, a person familiar with the deal said.

The sale follows Transurban’s rejection of a revised takeover bid submitted by OTPP, the Canada Pension Plan Investment Board (CPPIB) and Australian investor CP2 – which together owned 40 percent of the firm – last week valuing the toll road operator at A$7.2 billion (€5.1 billion; $6.5 billion) or A$5.57 per share. Transurban said the offer was too low.

Spokeswomen from Transurban and OTPP declined to comment on the sale while CPPIB and CP2 couldn’t be reached for comment. The sale was not unexpected, with previous media reports suggesting that after Transurban’s latest rejection, bidders would not be submitting another bid and may look to exit the company quickly.

According to the International Financing Review, a Reuters publication, OTPP netted A$710 million last night from the sale of 16 million shares at A$4.44 each, a five percent discount on the A$4.68 closing price. JP Morgan was the bookrunner with buyers including a “mixture of offshore and domestic accounts, hedge funds and long-only investors,” the publication reports.

OTPP and CPPIB had been negotiating a takeover of Transurban for the last seven months before they were joined by CP2 for their latest offer. Their first proposal was submitted late last year valuing Transurban at A$5.25 per share or A$6.81 billion. It was rejected for being too low.

When the bidders put their recent offer on the table they were joined by CP2. But Transurban’s acquisition of Sydney’s Lane Cove Tunnel prompted the company to launch a A$542 million capital raising which allegedly displeased the bidders. This was reflected on their A$5.57 per share offer, which was conditional on Transurban halting the capital increase. Had it chosen not to halt it, then the consortium was only prepared to offer A$5.42 per share, it said in a statement.

Despite the rejection, Transurban had said in a letter that it “remains willing to explore opportunities for constructive and harmonious relationships with members of the bidding group”.