Transurban Says Takeover Bids Didn't Reflect Toll-Road Operator's Value
Transurban Group has a “clear view” of the long-term value of the company and a takeover bid from its three biggest shareholders didn’t reflect its growth prospects, the Australian toll-road operator said.
“We have a first class suite of assets that is among the best in our sector globally, we have an attractive pipeline of growth projects at various stages of delivery and we have a healthy balance sheet that provides significant funding certainty in relation to our growth projects,” Chairman David Ryan said in the letter. “We did not believe that the premium being offered to acquire Transurban under the proposals was sufficient to compensate security holders for this value.”
The Melbourne-based company, which rejected a sweetened A$7.2 billion ($5.9 billion) takeover bid from CP2 Ltd., the Canada Pension Plan Investment Board and the Ontario Teachers’ Pension Plan, is now in the “best shape” it has ever been in, it said in a letter to security holders filed with the Australian stock exchange.
Ontario Teachers’ sold its stake in Transurban after the rejection, two people familiar with the sale said. Canada Pension is re-evaluating its holding in the company, executive vice-president of investments Mark Wiseman said on May 20.
An equity raising to help fund the company’s acquisition of the Lane Cove Tunnel in Sydney has “significantly improved” its funding position for other projects in the city, including planned upgrades of its Hills M2 and M5 toll roads, it said.
The company bought the tunnel for A$630.5 million, about a third of its construction and financing costs, Transurban said in the letter.
Transurban shares fell 0.9 percent to A$4.34 at 11:20 a.m. in Sydney.