Auckland International Airport Ltd, New Zealand’s largest, agreed to pay A$133 million (US$123 million) for a stake in two airports in Australia’s Queensland state to gain more from Asian travel.
The purchase of Westpac Banking Corp’s 25 percent stake in North Queensland Airports is expected to settle tomorrow, the Auckland-based company said in a statement to the New Zealand stock exchange. North Queensland operates the Mackay and Cairns airports, which jointly handle almost 3.7 million domestic and international travelers a year.
Auckland Airport, the arrival point for more than 70 percent of New Zealand’s visitors, is investing in new terminals and a hotel to help increase traffic. The Australian airports will provide a good return on equity and longer term will help draw more tourist traffic to Auckland, chief executive officer Simon Moutter said yesterday.
“It’s one of the things you would be most comfortable with them doing outside of investing in their current business,” said Stephen Walker, head of asset management at Goldman Sachs JBWere Ltd in Auckland.
Auckland Airport shares fell NZ$0.06, or 2.9 percent, to NZ$2.02 (US$1.49) at the 5pm market close in Wellington.
The acquisition will be initially funded from debt and subsequently the funding strategy could involve a mixture of equity and debt, the company said, without providing details.
The prospect of more shares being sold to investors has probably weighed on the stock price, Walker said.
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