28 Jul 2008

Dispute over airport expenses heads to court

12:55 pm on 28 July 2008

A dispute over millions of dollars in takeover costs between Auckland International Airport and its unsuccessful Canadian bidder is to be resolved in the High Court.

The disagreement is over whether $5 million the airport paid to two financial advisors was a properly incurred expense.

In April, the government's refused the Canada Pension Plan Investment Board's request for a partial takeover of the airport.

Under the Takeover Code, a target company can recover any expenses that were properly incurred from the bidder.

Auckland International Airport says the Canadian pension fund must pay $7.3 million in of outstanding takeover costs.

The Canadian investor has so far paid $1.3 million dollars, and is disputing some of the remaining expenses.

It has filed a statement of claim in the High Court.

The Canadian fund says it twice sought the airport's clarification over whether a $5 million payment to First NZ Capital and Credit Suisse were properly incurred, but airport failed to provide any information.

Auckland International Airport disagrees, saying it considers the disputed expenses were properly incurred and ought to be paid.

The Takeovers Panel says there is no recent court-tested definition of a properly incurred takeover expense.