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CBD  

Rival proposal off the MAp for some

The "independent" directors of Macquarie Airports board have done a sterling job of keeping their shareholders well informed and getting some price tension in their dealings with Macquarie.

The chairman of MAp's team of independent directors, Trevor "Garbled" Gerber, must have been so busy arm-wrestling with Macquarie over the price tag to internalise the management of the airport fund (a mere $345 million) that they did not get around to disclosing to the market a rival proposal, which it has since rejected.

Garbled received a letter from the rival group led by one of its shareholders, Lazard, 10 days ago. CBD would have thought the Global Airports (GAP) proposal to take over as responsible entity could have been material to MAp's security price.

The GAP team includes the AFL chairman, former Carlton captain and Hastings founder Mike Fitzpatrick, and the former (Hastings-managed) Melbourne Airport chief executive Chris Barlow.

Another member of GAP who must be a huge fan of MAp's current management is the former Copenhagen International chief executive, Kjeld Binger. He quit the group in 2006, the year after MAp took a majority stake.
 
The fourth GAP executive is Hamish de Run, a former Hastings operative and Copenhagen Airport director who quit in early 2007.

He jumped ship to join Binger, who had then become chief executive of the Dubai-based DAE Airports.

Inspiration ltd 

The team at United Group Limited are a creative bunch.

They have just come up with UGL Limited as the new name for the engineering firm. United shareholders will be asked to approve the new name at its annual meeting, which United says will represent "a single, core brand in all of its markets that would unify its multinational operations and create a single global marketing platform".

A United deep throat revealed to CBD it also had something to do with United not wanting to be confused with a certain American airline.

"When you go through the phone book there are so many companies listed as United that we had to be something else," the informant said.

The only problem the Trevor Rowe-chaired UGL could face in future is from graffiti artists who may attempt to add a Y to the company's name.

Eire Show

Fresh from meeting Fiji's ruler, Frank Bainimarama, Qantas's chief executive, Alan Joyce, dropped in to meet the leaders of another distressed island state over the weekend.

Joyce, Optus boss Paul O'Sullivan (aka POS) and the who's who of the global diaspora of Irish-born executives attended the Global Irish Economic Forum, which aimed to help the Irish Prime Minister, Brian Cowen, come up with ideas to drag his nation out of its economic rut. Joyce sat in the opening forum of the event, "The global economy: positioning Ireland for the upturn", with the Irish deputy leader, Mary Coughlan.

The Melbourne-born Etihad Airways boss and ex-Ansett executive James Reginald Hogan somehow managed to score an invite.

Maybe it has something to do with Etihad serving Dublin. The chief executive of British Airways, Willie Walsh, was not on the guest list. But we suspect Joyce may have dropped by Willie's place for a cup of tea when he passed through London last week.

Other attendees at the Irish forum included the director of the trans-gender IRA flick The Crying Game, Neil Jordan, musician Bob Geldof, Independent News & Media director Denis O'Brien and Goldman Sachs JBWere adviser (and Australia-Ireland Fund chair) Charles Curran.

The forum was wrapped up at the Gaelic football final between Cork and Kerry at Croke Park.

As for Joyce's beer preference, one of the Qantas chief's former drinking buddies confided to CBD: "He's just as partial to a Carlton Draught as a long-pouring Guinness."

High and Pricey

It is fortunate the Bureau of Statistics does not factor executive base remuneration into the consumer price index.

A wages breakout of Whitlamesque proportions appears to be sweeping the corporate offices of some listed companies.

Following the revelation that Peter Crowley, the chief executive of the toilet-making powerhouse GWA, copped an 18 per cent rise in base pay last year (even before bonuses), the executive pay inflation genie is on the rampage.

The SMS Management annual report released last Friday showed its chief executive, Tom Stianos, enjoyed a 12 per cent rise in base pay to $493,884.

It was also disclosed the chief executive of the loss-making medical device company AtCor Holdings, Duncan Ross, enjoyed a Weimar Republic hyperinflation-inspired 27 per cent rise in base pay to $407,015.

The West Ryde-based Ross even enjoyed an 86 per cent rise in his cash bonus to $234,612. AtCor chairman Donal O'Dwyer also copped a 22 per cent rise in his fees.


Psst! Got a tip? email srochfort@smh.com.au

 

Insider

Edited by Jamie Freed


Bridging the gap in the battle for MAp 

Global Airports (GAP) will begin an aggressive marketing campaign to institutional investors today to seek support for its rival proposal to internalise the management of Macquarie Airports. GAP, with help from Lazard, had already sounded out a few MAp shareholders about the idea of a rival proposal to the plan to pay $345 million to Macquarie Group, which is set to be voted on at a meeting on September 30.

The initial reaction was said to be positive. Now that its proposal has been made public, GAP will hold more extensive briefings with major non-Macquarie shareholders.

If the MAp directors, advised by Grant Samuel, continue to reject the proposal, one step for GAP could be to ask institutions to requisition a meeting to have Macquarie Group ousted as the responsible entity.

Macquarie, which owns 22 per cent of MAp, would be sure to vote against kicking itself out as the manager in return for no parting fee.

MAp rejected the GAP proposal primarily on the grounds that it would represent a change of control with risky consequences for actions such as renegotiating loans.

But Riskmetrics has noted there is no certainty that adverse debt consequences will not occur regardless of Macquarie's assistance.

Assuming Macquarie is a rational investor, the fact that its MAp stake is worth $1 billion should prevent it from punishing MAp for removing it as a responsible entity, since that would damage the share price.

If it used change of control clauses to punish MAp, Macquarie could also place at risk the value of another $985 million of holdings in its other listed satellites.

Numbers game

Myer's private equity owner, TPG, appears unlikely to make a final decision on whether it will retain a stake in the business after the $3 billion float until the company completes a bookbuild to determine the final price.

Insider hears that TPG's decision is likely to be influenced by considerations such as the amount of demand from retail investors and the bids placed by institutional shareholders.

Myer is on track to file a prospectus next Monday, which will include a pricing range alongside other details such as an earnings estimate for the year ended next July and management salaries, which are likely to have a higher base component and lower incentive component than under private equity ownership.

Retail investors will apply for a set dollar value of shares. The final price per share will be set after an institutional bookbuild expected to take place in November after weeks of local and international roadshows by Myer's management team and bankers.

The allocations process is sure to be controversial in a float that is said to have attracted the most pre-registrations from retail holders since the canned Snowy Hydro offering in 2006.

Pre-registration has been open only to Myer One card holders and Myer employees.

The prospectus will provide further details on the retail allocation process, but Myer One gold and silver members may receive priority rights to shares due to their higher spending at Myer.

If the Myer float proves successful, it is expected lead to a flood of new offerings from private equity.

GSJBW forecasts new floats will raise $15 billion this financial year, up from $700 million last financial year.

Worth a Look

After spending the weekend in talks with RBS and the hedge funds behind a new recapitalisation proposal received on Thursday evening, Babcock & Brown Infrastructure and its advisers have yet to decide whether it is superior to an initial proposal from Brookfield Asset Management.

BBI expects to advise the market of its view this afternoon or tomorrow morning, but the effort put into examining the new proposal – involving a $1 billion convertible bond and $350 million bank facility backed by existing lenders – shows it at least merited a serious look.

BBI will have to pay an undisclosed capped cost reimbursement to Brookfield if goes with the other deal, but that is small change in the scheme of things.


jfreed@smh.com.au