Indicative bids in for Melbourne toll road EastLink; Transurban MIA
Transurban has gone missing in action at the auction for a 55.45 per cent stake in Melbourne’s EastLink toll road.
Street Talk understands EastLink’s suitors submitted their first-round bids to sell-side adviser RBC Capital Markets on Monday evening. And the ASX-listed toll roads giant, which was stung by a speeding ticket from the competition regulator in September, did not lob a proposal, sources said.
However, it’s too soon to discount Transurban from the bidder field for the $300 million-a-year toll road. It still has a big advisory line-up on the tools, and is understood to be actively weighing if the auction is worth locking horns with the competition regulator.
Melbourne’s EastLink has at least three suitors without Transurban. John Woudstra
Appeasing the regulator – should it decide to take on the Australian Competition and Consumer Commission – is likely to take several months. Meanwhile, it would be up to the vendors and their advisers to decide if they want to press ahead without Transurban or accommodate it.
Bidder sources said EastLink’s second round is not expected to kick off until next year, and the vendors would use the Christmas break to think through the proposals tabled on Monday. Suitors had the option of bidding for the entire 55.45 per cent stake or for a smaller slice of the toll road.
This column has previously reported French giant Vinci Group is working with Rothschild; Spanish toll roads giant Abertis Infraestructuras has mandated Citi and JPMorgan; and Lazard is tending to Queensland Investment Corporation.
IFM Investors and DIF Capital Partners have been thrown around as candidates for whom EastLink could make sense – as has Atlas Arteria, although it publicly ruled out lobbing a bid earlier in the year. Lastly, private equity giant KKR has also taken a look.
Transurban has the biggest advisory line-up – Morgan Stanley, Barrenjoey, Macquarie Capital and Azure Capital. In addition to EastLink, its bosses would be keeping busy with a review into tolling prices ordered by the NSW government and a stake in Denver’s Northwest Parkway toll road, which is up for sale via American investment bank Evercore Partners.
The ACCC’s informal merger clearance decision, handed down on September 21, said Transurban’s mooted bid would entrench its position in Victoria, prevent the entry of rival operators, and make it the operator of every private-sector-controlled toll road in the country.
RBC, the sell-side adviser, opened the data room in mid-October after beginning early marketing in February. The toll road made just over $300 million in EBITDA in the last financial year and had $2.5 billion in debt.
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