Damon Kitney and Rebecca Urban
From: The Australian
July 16, 2010


CANADA'S second-biggest pension manager has made a takeover offer for an Australian toll road operator.

Its $3.5 billion bid for Intoll Group is its second multi-billion-dollar offer in less than a year for an Australian toll road operator.

Canada Pension Plan Investment Board (CPPIB) yesterday revealed a non-binding cash offer of $1.535 per stapled security for Intoll, which manages interests in the Westlink M7 motorway in Sydney and the 407 ETR in Toronto and is one of the spin-off groups of the former Macquarie Infrastructure Group.

The deal takes to more than $8bn the value of foreign takeover offers for Australian companies so far this month and continues the recent rush of mergers and acquisitions involving local firms.

Intoll chairman Paul McClintock recommended that shareholders take no action and said CPPIB had been given three weeks to conduct non-exclusive due diligence.

But Intoll's shareholders are expected to be receptive to the bid because it is pitched at a 38 per cent premium to Intoll's $1.115 closing price on Wednesday.

While Intoll securities closed 30 per cent higher yesterday at $1.45, analysts said the fact they remained below the bid price indicated investors did not expect a counter-offer.

CPPIB also said the offer price implied an enterprise value for Intoll of $5.1bn, representing a multiple of 29.2 times earnings before interest, tax, depreciation and amortisation. The 407 ETR in Toronto makes up about 90 per cent of Intoll's asset value.

"We are a purchaser that wants to do this on a friendly basis," CPPIB's senior vice-president, private investments, Andre Bourbonnais, told The Australian.

"We are a very disciplined buyer and this is, in our view, a price that fully values the asset and is a fair price."

Full article here