Auckland Airport’s former suitor turns sour

The Canada Pension Plan Investment Board (CPPIB) is suing Auckland Airport (AIA) for expenses relating to CPPIB’s partial takeover offer.

The claim also relates to a confidentiality agreement which prevents CPPIB from trading in Auckland Airport shares.

The CPPIB has paid only $1.34 million of the $7.6 million expenses Auckland Airport says it incurred responding to CPPIB’s partial takeover offer for the airport, so the amount in dispute is $6.26 million.

CPPIB have issued a statement saying that they have asked for clarification of issues and amounts "to determine if they were properly incurred", in particular details relating to a $5 million payment to First NZ Capital and Credit Suisse as an "incentive fee" for the "takeover defense". CPPIB say that no information has been given so far in response to their requests.

CPPIB also asserts that Auckland Airport does not have grounds for refusing to allow it to trade in Auckland Airport shares. CPPIB say they have sought "in good faith to obtain AIAL’s agreement since April this year that the no trading restriction does not apply in the current circumstances". Accordingly, they are seeking declarations and other redress from the High Court in connection with the no trading restriction.

Auckland Airport says it disagrees, and considers it has acted entirely reasonably and lawfully in relation to the confidentiality agreement between the parties at all times.

CPPIB's claims in relation to the confidentiality agreement include a damages claim (based on Auckland Airport's share price at closing on 25 July 2008) for approximately $2 million.

Auckland Airport intends to “vigorously defend the claim” brought by CPPIB.