Australia's state-owned Future Fund has made a bid of A$2 billion ($2.08 billion) to acquire the portfolio of Australian Infrastructure Fund (AIX), a listed fund that holds substantial stakes in several airport holding companies.
According to Hastings Funds Management, which manages AIX, the portfolio consists of a 28.2% stake in Airport Development Group, 29.7% in Airstralia Development Group, 12.4% in Australia Pacific Airports, 5.3% in Hochtief Airport Capital, 49.1% in Queensland Airports, and 6.3% in Statewide Roads, a toll road operator.
Future Fund added that the A$2 billion purchase price represents a 10% premium to the AIX directors' valuation published on 30 June 2012.
"Australian infrastructure assets are attractive to the Future Fund because of their strong correlation with Australian economic growth, inflation protection and relative high levels of earnings certainty," Future Fund chief investment officer, David Neal, said in a statement.
"These characteristics provide a strong fit with the Fund's mandate to achieve high, risk adjusted returns over the long term."
He added that A$4.3 billion, or 5.6% of the fund, is invested in infrastructure, and that it is interested in obtaining more infrastructure holdings both in Australia and overseas. The Future Fund already holds a 16.8% stake in Australia Pacific Airports, which means it will have a 29.2% holding if the AIX deal goes through.
Airport Development Group, which is also known as NT Airports, owns and operates Darwin International Airport, Alice Springs Airport and Tennant Creek Airport. Airstralia owns and runs Perth Airport, while Australia Pacific Airports owns Melbourne Airport.
Hochtief Airport Capital owns stakes in Greece's Athens International Airport, Germany's Düsseldorf and Hamburg airports, and Sydney Airport. Queensland Airports owns and operates Australia's Gold Coast Airport, Townsville Airport and Mount Isa Airport.
The deal requires approval from AIX directors and security holders, as well as Hastings' sub-committee of independent directors.
Established in 2006, the Future Fund is designed to help Canberra generate consistent returns for its public sector pension liabilities.