We didn’t get any clarification on the future of toll road operator, Transurban Group from its investor day on Friday.
There seems to have been a lot of talk about roadshows, meeting investors overseas, discussing the takeover proposal from the two big Canadian pension funds, and confidence in expansion in Australia, especially Queensland.
The shares initially rose, up 5c to $5.10 in morning trading Friday, but they retreated in the afternoon, against the overall trading direction which saw a rebound in late dealings.
The shares ended off 2c at $5.03.
The Future Fund revealed last week that it lost interest in any takeover deal for the group.
Then the company was queried about the fall in the share price from $5.15 on Tuesday to $4.86 on Wednesday.
TCL said it didn’t know and pointed to the announcement from the Future Fund.
The shares rose solidly on Thursday, back over the $5 level.
That seemed to continue in early trading Friday, and then the weakness emerged as it seemed the company was acting as though it will remain independent, despite the two Canadian groups owning 28% of the company.
The two funds are the Canada Pension Plan Investment Board (CPPIB) and Ontario Teachers Pension Plan (OTTP).
Transurban (TCL) used the presentation used at the investor day to reveal that it was interested in road assets to be offered for sale by the Queensland government midway through next year.
It would add these roads to its existing big holdings of toll roads here and offshore.
The briefing would have had the added benefit for the company of informing its biggest shareholders of what it was doing. That will include the two Canadian funds,
Transurban owns toll roads in Australia and the US, including the Hills M2 in NSW, CityLink in Melbourne and the Pocahontas 895 toll road in Virginia. It also has 50% of the huge M7 in Sydney.
Transurban said in the presentation on Friday that it saw Queensland was an attractive market.
The Queensland government has announced a sale program for Queensland Motorways Ltd (QML), the assets of which include the Gateway and Logan motorways.
"(The Queensland) government asset sales program may be attractive," Transurban said in the presentation slides.
"QML could be of interest if procured to suit a long-term owner and operator."
Transurban said there may also be "secondary" market opportunities.
In Queensland, these included the Rivercity Motorway Group and Brisconnections Unit Trusts.
In Victoria, they included ConnectEast Group. And in NSW, there was the financially challenged Lane Cove and Cross City Tunnels.
Transurban said it was taking part in the receiver’s sale process for the Lane Cove Tunnel.
It described itself as "the natural owner" of the Lane Cove Tunnel given the tunnel’s direct link to its M2 motorway.
The tunnel’s operator, Connector Motorways Pty Ltd, was placed in receivership last month with debts of more than $1.1 billion.
Transurban also said in the presentation slides on Friday that further negotiated projects had been identified in Sydney and Melbourne, but no approaches had been made.
The company also revealed further expansion plans in the US, especially Virginia, in and around the Washington area.
Many of these plans will need a lot fresh capital.
Could that be a possible way to a better future with a new trust built around a joint venture with the Canadian funds to bid for and invest in these Queensland and NSW assets if successful?
