19 Jul 2010

Surge in takeover activity

7:27 am on 19 July 2010

Merger and acquisition activity is increasing on the Australian market after a long lull.

Radio New Zealand's Sydney correspondent reports there's been a surge in takeovers.

The latest is a $A3.5 billion bid by the Canadian Pension Plan Investment Board for toll road operator Intoll Group.

The Canadian Pension group previously tried to buy into Auckland International Airport Ltd a couple of years ago.

This bid for Intoll Group is pitched at a substantial premium and represents a second crack by the Canadians at buying into Australian's toll road industry.

They were knocked back earlier this year with a bid of almost $A7 billion for Transurban Group.

Radio New Zealand's correspondent says toll roads and airports, with their reliable cash-like earnings streams, are attractive targets for pension funds, which seek to match long-term liabilities by buying assets that deliver steady returns.