OTPP in running for Leighton asset – report
Ontario Teachers' Pension Plan (OTPP), Canada’s third-largest pension fund, is reportedly among the final bidders for NextGen, the fibre-optics business being sold by Australian contractor Leighton Holdings. The deal could be worth as much as A$870 million ($908.15 million).
Leighton has appointed Macquarie to sell non-core assets Nextgen, data center designer-operator Metronode and cloud services provider Infoplex in September in order to pay down debt. The company has $295 million of debt maturing in July 2014.
Interest in NextGen comes at a time when it has been recording strong growth. EBITDA has more than quadrupled since 2009, with the business contributing to more than 10% of Leighton's 2011 earnings.
In December, KKR was said to have joined Providence Equity Partners and TPG Telecom in the bidding for NextGen. However, sources with knowledge of the matter told Reuters that both KKR and Providence are likely to drop their plans.
Hong Kong telecommunications company PCCW is also reportedly preparing a $300 million bid for Metronode and Infoplex.
OTPP has arguably been the most aggressive direct investor in Asia among the North American pension funds. In the first half of 2012 alone, it teamed up with Hastings Fund Management to acquire a 50-year lease on Sydney Desalination Plant for $2.35 billion and then bought a 9.9% stake in Korea's Kyobo Life Insurance for $398 million.
The pension fund is also in the process of opening a Hong Kong office next year as part of efforts to diversify its investments in Asia.
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