CPP moves for Aussie firm Intoll

The Canada Pension Plan has made a move for an Australian infrastructure company that, among many other investments, owns a minority stake in the 407 toll highway in southern Ontario.

The Canada Pension Plan Investment Board made a $3.2-billion preliminary bid Thursday for Intoll Group, a Sydney-based owner of infrastructure assets.

Intoll, a spinoff of Australia's most well-known financial conglomerate, was formerly part of Macquarie Infrastructure Group. In addition to the stake in the 407, Intoll also owns an interest in the M7 toll highway in Sydney.

CPP's offer of 1.535 Australian dollars ($1.40 Cdn) per share is a 38 per cent premium to what Intoll shares were trading at on the Australian Securities Exchange on Wednesday.

"We believe Intoll’s toll road assets are a good fit with CPPIB’s portfolio and long-term investment mandate, and are well situated strategically to benefit from future urban growth in Toronto and Sydney, Australia," CPP's senior vice-president of private investments Andre Bourbonnais said.

The offer is non-binding, and CPPIB will be conducting due diligence over the next three weeks. It is the pension fund's latest foray into the Australian market, after recently failing to acquire a similar firm.

In November, CPP made a joint offer for toll-road operator Transurban Group. But after a revised bid in May was again rebuffed by the would-be acquiree, co-bidder Ontario Teachers' Pension Plan backed out and the deal fell apart. CPP retains its almost 13 per cent stake in Transurban.