The CPP Investment Board has made a formal offer to acquire 100% of Macquarie Communications Infrastructure Group, the board said Tuesday.

In total, the offer and a related transaction represent a total equity investment by the CPPIB of $1.73 billion (AUS$2.03 billion).

CPP Investment Board is offering to purchase all of the stapled securities of Macquarie Communications for AUS$2.50 per stapled security ($2.12), reflecting an equity value for Macquarie Communications of AUS$1.37 billion ($1.16 billion).

If the offer is accepted, CPPIB will acquire Macquarie Communications’s manager, Macquarie Communications Infrastructure Management Ltd. (MCIML) by way of a separate inter-conditional offer, together with MCIML’s entire holding of 18.3% of Macquarie Communications stapled securities for AUS$2.50 per stapled security. To ensure a smooth transition of ownership, CPPIB has agreed to a transitional services agreement and an ongoing advisory agreement with Macquarie.

Macquarie Communications has three primary assets located in the United Kingdom and Australia:

• a 48% stake in Arqiva, the leading national broadcast transmission provider and communication infrastructure owner in the UK;

• a 50% stake in Airwave, the sole national provider of secure network access and communication solutions to the UK’s emergency and public safety businesses; and

• 100% of Broadcast Australia, which is the leading broadcast transmission provider in Australia.

Approximately 90% of Macquarie Communications’s revenues are derived from regulated businesses or long-term contracts with creditworthy counterparties, CPPIB says.

“This transaction enables us to acquire a diversified portfolio of high-quality infrastructure assets with stable cash flows at an attractive valuation. As a long-term investor, we look forward to working with each company’s management team to continue developing and growing their respective businesses,” says Mark Wiseman, senior vp, private investments for the CPPIB.

The offer, which has been unanimously recommended by the independent directors of Macquarie Communications, will be subject to the approval of Macquarie Communications’s stapled security holders.

CPPIB is being advised by Rothschild. Legal advisers are Freshfields Bruckhaus Deringer LLP and Allens Arthur Robinson.

IE