Australia’s largest toll company, Transurban, has made a final bid to buy a majority stake in WestConnex road system now under constriction, despite the competition regulator, the ACCC revealing concerns about any such purchase.
The bid saves the NSW government from the disaster of only having one buyer competing for the assets – the IFM led group of investors. IFM is owned by a group of leading industry funds.
Transurban shares fell 0.8% to $11.84 in yesterday’s big sell off.
The decision just before the deadline for final bids closed at 10am on Monday, keeps competitive tension in the bidding process for Australia’s largest infrastructure deal this year.
It means a Transurban-led consortium will be vying with IFM Investors and its partners for a 51% stake in WestConnex.
But how the government can get a higher price if the regulator is waiting to disqualify the Transurban group remains to be seen.
The NSW Government announced that once the final bids are received, the Government will take the time needed to carefully evaluate them before making a decision. The announcement also states that all bids must ultimately receive regulatory approval from the ACCC and the Foreign Investment Review Board.
Transurban said its bid is conditional on approvals from the Australian Competition and Consumer Commission and the Foreign Investment Review Board. Transurban has been engaging with the ACCC since December 2017.
Transurban said it remains confident that it will obtain all necessary approvals.
Chief Executive Officer Scott Charlton said “We will continue to work constructively and collaboratively with both agencies to enable the NSW Government to conclude its process as expeditiously as possible and achieve the best outcome for NSW taxpayers and road users.”
In its statement late last week, the ACCC said it was "delaying the decision date for its review of Sydney Transport Partners’ proposed acquisition of a majority interest in the WestConnex project. Sydney Transport Partners is a consortium led by Transurban Limited.The decision date for this review was 19 July 2018 and this has been delayed to 6 September 2018 to allow the ACCC sufficient time to consider the competition issues relating to the proposed acquisition”, the ACCC announced.
Transurban is Australia’s largest toll road operator. WestConnex is a partially completed motorway development in Sydney, comprising 33km of interconnected motorways and road upgrades.
ACCC Chair Rod Sims said.“We continue to have competition concerns, with many complex elements requiring analysis, and we need to get to the bottom of them before we make a decision.”
Transurban is Australia’s largest toll road operator. Transurban (or a Transurban-controlled entity) currently holds seven of the nine toll road concessions in NSW, including the M1, M2, M5 and M7 motorways.
In its statement of issues published on May 17, the ACCC raised preliminary concerns that the proposed acquisition may substantially lessen competition for concessions to construct, own and/or operate toll roads in NSW or nationally and in the markets for the supply of road services to motorists on various origin/destination combinations in the Sydney region.
