IFM Global Offers 21% Premium to Increase Vienna Airport Stakeby
Record-low interest rates send funds to alternative investment
Investor says stake exceeding 30% won't trigger full takeover
IFM Global Infrastructure Fund offered to pay a 21 percent premium to increase its stake in Vienna International Airport as the Australian private-equity investment company seeks stable income from infrastructure operators amid a drop in interest rates.
IFM plans to pay 100 euros a share to lift its holding in Flughafen Wien AG to 39.9 percent from 29.9 percent, the companies said Monday in a statement. That compares with Flughafen Wien’s 82.73 euro-a-share closing price on Friday. The airport operator, majority-owned by Austrian regional governments, jumped 17 percent to 96.49 euros as of 10:55 a.m. in Vienna.
IFM, which is based in Melbourne and has been Flughafen Wien’s biggest single shareholder since 2014, manages $3.98 billion worth of investments on behalf of 30 pension funds and has been adding infrastructure assets in the U.S., Australia, Poland and Germany. Record low interest rates challenge the ability of retirement funds to meet their obligations to aging populations across the industrialized world. Flughafen Wien earlier this month reported net income of 100.4 million euros ($111.7 million) for 2015 and proposed a dividend of 2 euros a share.
“It’s a function of the current yield environment,” said Stefan Maxian, an analyst at Raiffeisen Centrobank AG, which advises investors to buy Flughafen Wien shares. “It’s more or less an infrastructure investment with secure dividend flows.”
The offer to raise IFM’s holding above a 30 percent threshold is unlikely to trigger a requirement of a full takeover bid for Flughafen Wien because the airport operator is already jointly controlled by the state of Lower Austria and the city of Vienna, the investor said. A spokesman at Austria’s Takeover Commission, which will rule on the matter, declined to comment beyond saying IFM’s bid is an “ongoing procedure.”