In a statement issued yesterday, Australian toll road operator Intoll said it had “not yet formed a view as to the adequacy” of a A$5.1 billion (€3.6 billion; $4.7 billion) takeover offer from the Canada Pension Plan Investment Board (CPPIB).
Intoll said it had agreed to extend the due diligence period for “approximately one week” and that it would continue to engage with CPPIB “to determine whether an acceptable transaction can be agreed and put to security holders”. An initial three-week period of due diligence commenced when Intoll notified the Australian Stock Exchange it had received the non-binding offer on 15 July.
Intoll emerged from a division of Macquarie Infrastructure Group (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.
CPPIB said its offer for Intoll equates to a multiple of 29 times Intoll’s estimated earnings before interest, tax, depreciation, and amortisation (EBITDA) for 2010, “which compares favourably to the multiples implied by other toll road transactions,” the pension added. It said it would fund the offer from its existing resources.
Under the terms of the Canadian pension’s offer, Intoll’s shareholders can choose between an all-cash offer for their securities, the option of rolling over their stakes into a newly formed unlisted vehicle, or a combination of both.
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.