France’s Vinci test drives banks for EastLink tilt; Transurban digs in
Paris-headquartered concessions player Vinci Group has begun meeting with investment banks for a potential buy-side mandate, as it weighs a tilt at Melbourne’s EastLink motorway.
Sources said Vinci has held talks with a handful of infrastructure advisory units this week, suggesting it is not just kicking tyres at EastLink. Of note, Vinci wouldn’t have a big list of bankers to shop from, given several of them are saddled to Transurban.
Owners of EastLink will collect first-round bids in late November.
It is understood the ASX-listed toll roads giant still hasn’t released its advisory lineup – Macquarie Capital, Morgan Stanley, Barrenjoey and Azure Capital – from their mandates.
That’s despite the Australian Competition and Consumer Commission opposing its proposed bid on September 21, and despite Transurban not having appealed the decision so far. Its chairman Craig Drummond was asked about the matter at its annual general meeting just last week, and said Transurban was “working feverishly” to decide whether to appeal.
As this column has previously reported, Citi and JPMorgan have signed up to work for Spanish toll roads giant Abertis Infraestructuras, while Lazard is tending to Queensland Investment Corporation (QIC).
All eyes are on Atlas Arteria, which ruled out a bid in the past, which is battling France’s new motorway tax like Vinci, and is just a year out from a chunky acquisition.
Yet, it is seen as a logical bidder, and tapped UBS and RBC Capital Markets for its $3 billion acquisition of Chicago Skyway just last year. IFM Investors and DIF Capital Partners have also been thrown around as parties for whom it would make sense to look at the EastLink stake.
With the way things stand at Transurban, there’s only four banks – Goldman Sachs, Bank of America, Jefferies and Jarden – whose infrastructure advisory talent would be available for any serious bidders.
Sell-side adviser, RBC, opened the data room on October 16 and is due to call for non-binding indicative offers in late November. Up for grabs is a 55.45 per cent stake in the toll road, which made just over $300 million in EBITDA in the 2023 financial year and had $2.5 billion debt – on a 100 per cent basis.
Sources said suitors are being given the option of bidding for small slices of the concession, even though initial investor marketing stressed the attractiveness of a controlling stake.
Horizon Roads owns ConnectEast, which owns the EastLink toll road that stretches 39 kilometres and connects Melbourne to the Mornington Peninsula.
Its shareholders include APG, South Korea’s National Pension Service, NZ Superannuation Fund, CIC, Teachers Insurance and Annuity Associate of America, Britain’s Universities Superannuation Scheme, Denmark’s ATP, Mirae, CP2 and Terdot.
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