Australian Road Operator May Reject Canadian Pension Bids

Transurban, Australia’s biggest toll road operator, plans to raise enough capital to finance its acquisition of Sydney's troubled Lane Cove Tunnel.

(May 10, 2010) — Amid a still tough market for infrastructure fundraising, Transurban Group, which owns toll-roads in Australia and the U.S, will sell shares to pay for an agreed $568.5 million purchase of Sydney’s Lane Cove Tunnel. The transaction could result in the end of a bid by two major shareholders to privatize the company.

Melbourne-based Transurban Group is subject of a takeover offer from two Canadian pension funds — the Canadian Pension Plan Investment Board and the Ontario Teachers’ Pension Plan. The two funds together own about 28% of Transurban, according to Bloomberg data. Both pensions have said they may not proceed with a revised bid if Transurban were to fund its takeover of the Lane Cove Tunnel, opened in 2007, via an equity-raising. In November, Transurban rejected the pension funds’ $6.1 billion unsolicited offer.

Yet, Transurban CEO Chris Lynch recently denied the transaction was a planned defensive move, according to The Australian. He claimed the company was pursuing “business as usual.”

“There is clear strategic value in expanding our interests on the Sydney orbital network given our existing ownership stakes in four of the assets on the network,” said Transurban CEO Chris Lynch in a statement. “Transurban is a natural owner of the Lane Cove Tunnel and we believe the asset sits extremely well within our portfolio of prime toll roads.”

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Meanwhile, Canada Pension Plan Investment Board announced the purchase of a minority ownership stake in two prime midtown commercial properties for a combined cost of $663 million, the plan’s first purchases of real estate in Manhattan.

“We remain focused on our U.S. real estate investment strategy, which is to acquire premier commercial properties in key markets,” Peter Ballon, CPPIB’s head of real estate investments in the Americas, said in a press release.

Separately, Stamford, Conn.-based Global Infrastructure Partners (GIP), the owner of London’s Gatwick and City airports, is preparing to raise a second $5-billion fund, Reuters reported. Already, GIP has invested up to $4.5 billion of its first $5.64 billion fund, focusing on energy, transport and waste assets such as ports, power stations, and waste management. Earlier this year, GIP sold stakes in Gatwick to the roughly $328 billion Abu Dhabi Investment Authority (ADIA), the world’s largest sovereign wealth fund, and to South Korea’s National Pension Service, which had 289 trillion won in assets as of March. Both investors are likely to be contacted over the new fund.



To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

CalPERS Votes to Separate Chairman and CEO Roles at Goldman; Blankfein Defends Reputation

The largest U.S. public pension fund said it believes if the Goldman chair is not the CEO, the board may be able to exercise stronger oversight of management; Goldman CEO Lloyd Blankfein faced shareholders at the annual meeting Friday in New York.

(May 10, 2010) — The California Public Employees Retirement System (CalPERS), the largest U.S. public pension fund which holds close to $258 million in Goldman stock, voted for a shareholder proposal to split the roles of chairman and chief executive officer currently held by Lloyd Blankfein at Goldman Sachs Group Inc. CalPERS said it voted 1.81 million Goldman shares.

The $201.6 billion fund announced on its website that it would require Goldman to fully report political contributions and to separate the positions the next time it names a CEO. “CalPERS believes if the chair is not the CEO, the board may be able to exercise stronger oversight of management,” the pension fund said on its website. On the other hand, Goldman’s board unanimously opposed splitting the roles.

In other recent news about the troubled bank, Blankfein faced shareholders at the annual meeting Friday in New York, acknowledging that the bank’s image has been tarnished by the SEC’s civil fraud charges, as well as a criminal inquiry by the Justice Department. Goldman Sachs’ role in the financial crisis is under continued scrutiny, as the SEC tries to prove its allegation that the bank committed fraud by failing to disclose conflicts of interest in mortgage investments it sold as the housing market was waning.

Blankfein, who has led the company for almost four years, used the investment bank’s annual meeting as a platform to rebuild Goldman’s reputation. According to the Wall Street Journal, the CEO said the company would organize a business standards committee that would examine how the company could handle scrutiny over its business practices.

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To contact the <em>aiCIO</em> editor of this story: Paula Vasan at <a href='mailto:pvasan@assetinternational.com'>pvasan@assetinternational.com</a>; 646-308-2742

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