CANADA - The Canada Pension Plan Investment Board (CPPIB) has offered to pay C$1.16bn (€697m) to buy Macquarie Communications Infrastructure Group (MCG).
The bid is part of the C$108.9bn pension fund's plans to invest in infrastructure assets that offer reliable long-term cash flows and are located in familiar regulatory environments.
"This transaction enables us to acquire a diversified portfolio of high-quality infrastructure assets with stable cash flows at an attractive valuation," said Mark Wiseman, senior vice president of private investments for the CPPIB.
If the bid is accepted, the CPPIB will obtain the firm's manager, Macquarie Communications Infrastructure Management Limited, and its entire holding - 18.3% - of MCG staple securities at A$2.50 each.
The offer to buy MCG was recommended by the firm's independent directors and is subject to the approval of MCG's stapled security holders.
Commenting on the pension fund's future investment plans, Wiseman said: "Current economic conditions provide a unique set of opportunities for investors with liquidity and a long investment horizon like the CPP Investment Board.
"We will be disciplined as we continue to evaluate a number of new investment opportunities that can potentially deliver excellent long-term, risk-weighted returns to the CPP fund," he added.
MCG, which gets the majority of its revenues from regulated businesses or long-term contracts with counterparties, has three primary assets in the United Kingdom and Australia. These include a 50% stake in Airwave, a UK network provider, 48% stake in Arqiva, a broadcast transmission provider, and full ownership of Broadcast Australia.
To ensure a smooth ownership transition, the CPPIB will continue its advisory agreement with Macquarie and has agreed to a transitional services agreement. The pension fund's bid and the transaction procedures are expected to cost a total of C$1.73bn and represent a A$7.32bn value for MCG.
The CPPIB is managed independently of the Canada Pension Plan to pay benefits to 17 million Canadian contributors and beneficiaries.
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