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Canada Pension Plan Investment Board (CPPIB) sweetens bid for Macquarie Communications Infrastructure!

By Amarendra Bhushan for CEOWORLD Magazine Updated:June 16, 2009

Canada Pension Plan Investment Board (CPPIB)’s $1.4 billion takeover offer for Macquarie Communications Infrastructure Group is likely to proceed after the offer was raised to win the support of the target’s major security-holders.

Two major shareholders holding over 20 percent in Macquarie Communications Infrastructure Group intend to vote in favour of a revised bid for the group from a Canadian pension fund.

Lazard Asset Management, which holds a 10.9 percent stake in Macquarie Communications intended to vote in favour, and Tyndall Investment Management, with 10.6 percent would do the same.

MCG owns and operates broadcast infrastructure in Australia and the UK including radio and television transmission towers.

The Canada Pension Plan Investment Board (CPPIB) has offered $2.50 cash for every MCG stapled security, valuing the target at $1.37 billion and implying an enterprise value including debt of $7.3 billion.

The special distribution would be funded in whole or part by CPPIB by way of a loan to MCG.

“The independent directors are delighted that CPPIB has chosen to revise its offer to Macquarie Communications security holders and unanimously recommend that Macquarie Communications security holders vote in its favour,” said Malcolm Long, head of Macquarie Communications’ independent board.

Mark Wiseman, Senior Vice-President, Private Investments said: “At the time of our initial proposal, there was considerable uncertainty in the markets and the original value of our proposal reflected that market uncertainty. Today, the capital markets have improved considerably. We feel the enhanced proposal is appropriate in order to help secure the support of MCG’s largest security holders given the changed environment.”

“We are pleased that MCG major security holder support for the transaction has been confirmed and that MCG’s Independent Directors have continued to believe that the proposal is in the best interests of security holders,” said Mr. Wiseman. “We continue to believe that this transaction enables us to acquire a diversified portfolio of high-quality infrastructure assets with stable cash flows at an attractive valuation.”

Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries.

In order to build a diversified portfolio of CPP assets, the CPP Investment Board invests in public equities, private equities, real estate, inflation-linked bonds, infrastructure and fixed income instruments.

Headquartered in Toronto, with offices in London and Hong Kong, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2009, the CPP Fund totaled C$105.5 billion. For more information, please visit www.cppib.ca.

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