Ann: Non-binding Indicative Approach for IFT Shares, page-10

Infratil's huge management fees complicate AusSuper bid
by Bloomberg, December 10, 2020 12:15 AMLosing Infratil as a customer would therefore likely result in a loss of around a third of its income.AustralianSuper declined to comment on whether it would keep Morrison & Co on if it acquired the company, but sources close to the parties said the high management fees were a sticking point. AustralianSuper manages 43 per cent of its $200 billion assets under management in-house and is a specialist investor in infrastructure, meaning it would have the capacity and expertise to manage the assets itself, and would likely look to do so at a lower cost.
There is no evidence that intimate ties between Infratil and Morrison & Co influenced the decision to knock back AustralianSuper's offer. Apart from Mr Bogoievski, who is a director of both companies, there is no crossover of board members. A spokesman for Infratil said a subcommittee of independent directors, excluding Mr Bogoievski, had been set up to assess AustralianSuper's offer.Morrison & Co is not a shareholder in Infratil, though Mr Bogoievski himself owns shares worth around $12 million at current share value, its most recent annual report shows.Infratil's biggest shareholder, New Zealand's national accident compensation insurance scheme ACC, has said it wants Infratil to open its books to the superannuation giant, but others have been less enthusiastic. Its second-biggest shareholder, Fisher Funds Management, told the NZ Herald AustralianSuper's offer undervalued the company.
Fisher senior portfolio manager Sam Dickie argued AustralianSuper's offer, which valued the company at a 22 per cent premium of its Tuesday share price, did not adequately value Infratil's average total return since inception in 1994 – that is, capital growth plus dividends – which sits at 18 per cent per annum.ACC's enthusiasm is not enough to force the board to act, as it owns just 6 per cent of Infratil. Infratil has a large number of small institutional and retail investors, and this lack of ownership concentration would make it hard for AustralianSuper to go directly to shareholders with its bid. So far the board has declined to engage.AustralianSuper's commitment to the acquisition is not in question, as it spent a year examining the deal before making its first offer in October, which it then increased in November. However, sources with knowledge of the matter said AustralianSuper was unlikely to raise the offer for a third time unless investors gave it an idea of what they would consider good value, as the super giant was not prepared to go into a bidding war with itself.