Goldman Sachs’s infrastructure arm and Infracapital are selling their 33.33 per cent stake in Associated British Ports to a consortium of Canada Pension Plan Investment Board and Hermes Infrastructure for £1.6bn.
The buyers are acquiring an initial 30 per cent of the UK’s leading ports group, which owns and operates 21 ports in Britain, including the UK’s two busiest — Immingham, located near Hull, and Southampton.
The remaining 3.33 per cent is subject to pre-emption rights of existing shareholders, the Government of Singapore Investment Corporation and Borealis, but the buyers expect they will be able to purchase it.
Peter Hofbauer, head of Hermes Infrastructure, said: “We can’t be certain but we’re confident of getting the 3.33 per cent. There’s nothing to say at this juncture that we can’t get it.”
GS Infrastructure Partners had 23.33 per cent and Infracapital, a division of M&G Investments, held 10 per cent of ABP. They held the shares in closed-end funds which had a finite lifespan and are returning the money to investors.
The four investors bought ABP in 2006 for £2.8bn.
In 2013 ABP’s facilities handled 93.9m tonnes of cargo and generated earnings before interest, tax, depreciation and amortisation of £292m.
Mr Hofbauer declined to say how much of ABP Hermes would be buying but said the 33.33 per cent would be divided up in a similar way to GSIP and Infracapital’s stakes, with CPPIB buying the larger portion.
He said Hermes Infrastructure, which is part of Hermes Investment Management, was investing on behalf of clients who comprise mostly UK institutional pension funds. He added that the purchase was the company’s second largest infrastructure investment behind its 13 per cent stake in Thames Water. Before this acquisition it had invested £3.1bn on behalf of clients.
Hermes intended to hold the shares for 15-20 years, Mr Hofbauer said. “Management have a very clear business plan that they’ve been implementing with some success,” he said. “We’re looking to support management to grow their business.”
CPPIB had investments of £7.6bn as of the end of 2014.
The transaction is expected to complete this summer, subject to antitrust clearances.
Cressida Hogg, managing director and global head of infrastructure of CPPIB, said the board was “excited about this unique opportunity to invest in a significant portfolio of landlord ports with a proven track record of steady operational performance”.
Goldman Sachs and Gleacher Shacklock acted as financial advisers to the sellers.
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