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Auckland international airport bid in doubt after tax loophole closed

Auckland international airport bid in doubt after tax loophole closed

Auckland International Airport shares fell 12 percent yesterday on speculation that a partial takeover bid could be in doubt after the government moved to close a tax loophole.
Canada Pension Plan Investment Board is seeking a 40 percent stake in New Zealand's main gateway airport in a deal with a cash component and stapled securities comprising a mix of ordinary shares and convertible notes - partly tax deductible for investors.
Last night the government moved to plug the tax loophole involving stapled stock instruments, including those being offered for the airport.
"The risk to tax revenue must be dealt with as a matter of urgency," the finance and revenue ministers said in a statement.
They said the move was announced without consultation with interested parties because of growing interest in using the stapled stock instruments in New Zealand following their international popularity.
Companies can use stapled stock instruments to pay tax-deductible interest to shareholders as a substitute for dividends, creating problems for tax-gathering if the instruments are issued by foreign investors in New Zealand companies.
CPPIB has offered 3.6555 NZ dollars a share in the airport, reducing to 3.5980 dollars as a result of a 5.75 cents a share interim dividend to be paid next month.
The CPPIB bid was worth some 1.8 billion dollars (US$1.4 billion) and valued the airport company at 4.46 billion dollars (US$3.6 billion).
Yesterday's stock price slide cut some 415 million dollars (US$338 million) from the company's capitalization.


Updated : 2021-08-02 23:34 GMT+08:00