All roads leading Transurban's wayEmail Print Normal font Large...

All roads leading Transurban's way
Email Print Normal font Large font Mathew Murphy
April 11, 2007

Advertisement
AdvertisementTRANSURBAN is on the verge of becoming an $8 billion industry leader, having declared its $1.25 billion bid for Sydney Roads Group unconditional.

Transurban's absorption of its smaller rival will give it an effective monopoly on Sydney's toll roads.

It has now cleared all major hurdles, with a pre-emptive rights issue concerning minority shareholder Industry Funds Management resolved and the NSW Roads and Traffic Authority signing off on the bid last week.

The Australian Competition and Consumer Commission gave its approval for the takeover last month.

The SRG board agreed to the bid in December and will recommend it to its shareholders. The offer is scheduled to close at 7pm on Monday.

Andrew Head, Transurban's head of investor relations, said Industry Funds Management's pre-emptive right on Sydney's Eastern Distributor toll road would be preserved but "won't play out in this transaction".

Now that the offer is unconditional, attention turns to how many SRG shares Transurban will be able to secure. Despite the obstacles it has faced, Transurban has so far secured 31.66 per cent of SRG.

Austock Securities infrastructure analyst Andrew Chambers said he estimated Transurban would garner more than 80 per cent of SRG, at which point capital gains tax rollover relief would be triggered for investors.

If acceptances reach 90 per cent, Transurban can delist the company and compulsorily acquire the outstanding shares.

Hedge funds are believed to be keen to sell while Capital Partners, which owns about 10 per cent of SRG, refused to comment.

Transurban managing director Kim Edwards issued a statement encouraging shareholders to take up the offer, saying they would receive a letter this week outlining the reasons.

Transurban, which owns CityLink, yesterday released figures showing last month's incident in the Burnley Tunnel, in which three people died, had a significant effect on traffic numbers.

CityLink recorded a 2 per cent increase in traffic for the March quarter compared with the same time last year. However, the Burnley Tunnel incident resulted in a 1.6 per cent decrease in traffic numbers.

CityLink toll and fee revenue jumped 8.2 per cent for the quarter to $81.3 million. Transurban shares rose 5¢ to $7.74.

http://www.transurban.com.au