Australia's Macquarie Bids For Copenhagen Airports

October 24, 2005

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Australia's Macquarie Airports offered to buy Copenhagen Airports on Monday in a deal that values the Danish firm at DKK15.7 billion kroner (USD$2.51 billion), to boost its global reach in a fast-growing industry.

The board of directors of Copenhagen Airports recommended the offer unanimously, saying it represented an attractive premium to all recent equity analyst target prices.

The Danish government said it would not sell its 39.2 percent holding in the airport operator, but Macquarie said it did not need the stake for the deal to succeed.

Macquarie Airports is an airport investment fund spun off by Australian investment bank Macquarie Bank in 2002. It owns major stakes in airports in Sydney and Rome and in regional terminals at Birmingham and Bristol in the UK.

A surge in air travel has made airports attractive investments as they cash in from aircraft take-off and landing fees and revenue from retail outlets, car parks and other facilities.

"Compared to what we see as the fair value, it is a relatively high bid," said Jyske Bank analyst Torsten Bech. "And as Macquarie is already a shareholder in Copenhagen Airports there is only a small chance for a counter-bid."

The Danish company's base in Copenhagen is the largest airport in Scandinavia, with SAS its biggest customer.

Since 1998, Copenhagen Airports has expanded beyond Denmark to invest in airports with greater growth potential and now has interests in China, Britain and Mexico.

Macquarie Airports said its bid of 2,000 kroner (USD$320) per share was around 31 percent above the average share price on October 21.

Macquarie, which already owns 14.7 percent of Copenhagen Airports, had previously indicated it wanted to buy the state's holding, but was turned down by the government.

Finance Minister Thor Pedersen said in a statement on Monday that Copenhagen Airports was a well-run company which created significant values for its owners and that the state would therefore keep its stake.

Macquarie said its offer was subject to the condition that it receive acceptance from more than 50 percent of the shareholders and voting rights.

"The success of the offer is not dependent on the state reducing its holdings," Macquarie Chief Executive Kerrie Mather said at a news conference.

Danish pension funds LD and PFA with 1.6 and 1.4 percent of the shares respectively have accepted the bid, Macquarie said.

Mather described Copenhagen Airports as "the jewel in the crown" and that Macquarie would utilise the skills of the Danish management team in its other international investments.

Due to the bid from Macquarie, Copenhagen Airport said it would end its participation in the privatization process of Budapest Airports.

Last week, a Bulgarian court overturned a government decision to grant Copenhagen Airports a 35 year concession to run two Black Sea airports. Copenhagen Airports said then it would consider taking legal action against the Bulgarian government.

Copenhagen Airports said it would continue the suspension of its share buy-back program during the period of the offer.