Commuters on Ontario’s 407 Express Toll Highway will soon be investing in their pensions each time they travel the pay route after the Canada Pension Plan assumed its first stake in the road Thursday.
The CPP Investment Board — which invests money not required to pay benefits under the Canada Pension Plan — says it has completed the purchase of a 10% stake in the road.
It paid $894-million offer to buy the stake from Spanish majority owner Cintra Infraestructuras, one of the world’s largest private transport infrastructure companies, a spinoff of Spain’s Ferrovial Group.
The deal was cleared last month after SNC-Lavalin, the Montreal-based engineering and construction giant with a 16.7% stake in the road, rejected its right of first refusal to acquire the stake.
SNC-Lavalin abandoned plans for a public offering to pay for an extra 10% stake in the lucrative electronic toll route.
The CPPIB did not previously hold any interest in the toll road, but if a deal with Australian infrastructure company Intoll Group goes ahead, it will own 40% of the highway and become its second-largest stakeholder after Cintra.
Earlier Thursday, the investment arm of the CPP inched closer toward acquiring Intoll Group, which owns a 30% stake in the road.
Securityholders of the group, formerly Macquarie Infrastructure Group, approved a $3.2-billion takeover by CPPIB with 95% of votes cast at a meeting favouring the deal.
That transaction is scheduled to close Dec. 14.
“Intoll directors welcome the strong support by securityholders for the CPPIB proposal today. The boards’ view (is) that the CPPIB proposal is compelling and represents fair value,” said Intoll’s chairman Paul McClintock.
The 407 is owned by a consortium comprised of Cintra Infraestructuras, Intoll Group and SNC-Lavalin Inc. (TSX:SNC).
Highway 407 stretches 108 kilometres from Queen Elizabeth Way near Burlington, Ont., on a northeastern path that skirts Toronto and reaches Pickering in the east.
CPP Investment Board acquires 10% of Ontario toll road
CPPIB will own 40% of 407 ETR if deal with Australian infrastructure company proceeds
- By: Sunny Freeman
- November 19, 2010 December 14, 2017
- 10:10