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Bid made for controlling share of WestConnex toll road

Allen & Overy has advised joint lead managers Macquarie, Morgan Stanley and UBS on Transurban’s capital raising for a consortium bid for a controlling share of the WestConnex toll road project in the third largest secondary equity raising in Australian corporate history.

user iconGrace Ormsby 17 September 2018 Big Law
Raised money, bid, Australian cash
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Firm: Allen & Overy (Macquarie, Morgan Stanley and UBS), KWM (issuer’s Australian counsel) and Sidley Austin (issuer’s US counsel)

Deal: Allen & Overy has advised joint lead managers Macquarie, Morgan Stanley and UBS on Transurban’s capital raising for a consortium bid for a controlling share of the WestConnex toll road project.

Value: $4.8 billion

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Area: Corporate, M&A

Key players: Allen & Overy partners Tony Sparks, Mark Leeman and Peter McDonald acted on the deal, alongside senior associate Harsha Kumar, and counsels Cécile Baume and Stefanie Benson.

Deal significance: Allen & Overy has acted as combined Australian and US counsel to Macquarie, Morgan Stanley and UBS as joint lead managers of Transurban’s “$4.2 billion underwritten accelerated renounceable entitlement offer with retail rights trading”, according to a statement from the firm.

In a concurrent private placement to Sydney Transport Partners consortium, Transurban also raised $600 million.

Following a competitive sale process, the Transurban-led Sydney Transport Partners consortium agreed to acquire 51 per cent of the NSW government’s WestConnex toll road project.

Proceeds of the equity raising will be used to fund Transurban’s equity contribution to Sydney Transport Partners and for general corporate purposes.

The $4.8 billion equity raising is the third-largest secondary raising in Australian corporate history. It is the largest ASX M&A fund raising.

Structured as a PAITREO (pro-rata accelerated institutional with tradeable retail entitlement offer), the entitlement offer was a structure that “offers the advantage of the speed for capital raising while alleviating concerns around the differential treatment between institutional and retail shareholders in entitlement offers”, Allen & Overy explained. It allows retail shareholders to sell entitlements on ASX immediately after an institutional offer is completed.

The transaction included a concurrent offer by Transurban to a limited amount of large US institutional investors.

Partner Mark Leeman said Allen & Overy values their long association with Transurban, “with which we’ve now worked to raise over $10 billion of capital across both equity and debt.

“This was a particularly important deal for both Transurban and the market, given its size and the increasing complexity of the Australian ECM landscape,” he continued.

“For our team, it’s the continuation of a fantastic year in ECM.”

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