CP2 $6.4 Billion Bid for Transurban Unlikely to Be Increased, Group Says

A spurned $6.4 billion takeover offer for Transurban Group, an Australian toll-road operator, is unlikely to be raised, said CP2 Ltd., part of the bidding group.

The A$5.57 ($4.97) a share offer was “very full and fair,” Peter Doherty, managing director of Sydney-based asset manager CP2, said in an interview on the Australian Broadcasting Corp.’s Inside Business program.

Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan and CP2, which owned a combined 42.4 percent of Melbourne-based Transurban, were seeking control of assets including the Pocahontas 895 in Virginia and four Sydney toll roads. The offer was 14 percent more than the last traded price before the bid.

“It is very unlikely that CP2 would ever come back at a higher price than that,” Doherty said. “I would like the company to reconsider and just canvas a few more shareholders just to see whether we actually are being very fair.”

Transurban closed at A$4.80 on the Australian stock exchange on May 14, dropping to a six-month low after analysts said the bid was unlikely to be raised.

“They want to leave some money on the table for their own shareholders,” Sanjay Magotra, a Sydney-based infrastructure analyst at Southern Cross Equities Ltd., said on May 13. “The Canadians and CP2 don’t have to return with a revised offer because they’re long-term investors and they can sit on the sidelines for 12 months, a year, two years, till it drifts back to where it creates a return,” he said.

Transurban rejected the bid and said it would go ahead with a A$542.3 million share sale to help fund its purchase of the Sydney Lane Cove Tunnel to extend its Sydney road network. The company said May 12 it had raised A$410 million at A$4.60 a share from the institutional component of the equity sale.

The offer from the bidding group was an “inadequate price for control of Transurban given its performance and prospects,” the company said in a statement to the Australian stock exchange on May 12.

To contact the reporter on this story: Wendy Pugh in Melbourne at wpugh@bloomberg.net;

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