Challenger Limited · ASX:CGF
Challenger — Challenger Infrastructure Fund — Merger or Acquisition (November 2005)
22 slides from Challenger's merger presentation, Nov 30, 2005
Slide 1: Recommended Cash Offer for PD Ports plc
Challenger Infrastructure Fund Recommended Cash Offer for PD Ports plc 30 November 2005
Slide 2: Agenda
Agenda 1. Summary 2. PD Ports highlights 3. CIF Investment Highlights 4. Consortium and CIF funding 5. Additional information 2
Slide 3: 1. Summary
¢ ye & challenger 4. Summary
Slide 4: Summary
Summary • The Endeavour Ports consortium has announced the terms of a recommended cash offer to acquire 100% of PD Ports plc. • Endeavour includes Challenger Infrastructure fund (“CIF”) (18.4%), Challenger Life (16.1%), Industry Funds Management (50%) and 3i (15.5%) • Acquisition is to be made by wa
Slide 5: UK Ports sector overview
UK Ports sector overview Forth Ports ABP PD Ports Grangemouth Fife Peel Holdings Dundee Leith Hutchinson Port Holdings Hunterston Rosyth Greenock Glasgow Redressing Tees&Hartlepool Howden Ayr Keadby Troon Silloth Grimsby & Immingham Barrow Hull Fleetwood Goole Garston Manchester Ship Canal Kings Hey
Slide 6: PD Ports meets all of CIF's investment criteria
PD Ports meets all of CIF’s investment CIF Investment Criteria PD Commentary Ports Regulated industry or near 3 Partially regulated geographic monopoly means. UK’s monopoly market position second largest port by tonnage Rail and major road access feeds directly to port operations Strong cash gen
Slide 7: 2. PD Ports highlights
e ye & challenger 2. PD Ports highlights
Slide 8: Overview
Overview • PD Ports is a UK-listed ports company which owns the Port of Tees and Hartlepool (“Teesport”), the UK’s second largest port by tonnage, and acts as its statutory harbour authority. In addition, the Group operates a series of smaller ports in the UK and provides stevedoring and other marit
Slide 9: Principal Business Activities
Principal Business Activities Teesport • PD Teesport is the statutory harbour authority for Teesport. Located in the north-east of England, it handled 53.7m tonnes in the year to March 2005. Its principal activities are: — Bulk cargo handling and storage — Operation of two Lo-Lo container terminals
Slide 10: Principal Business Activities
Principal Business Activities PD Logistics • PD Logistics offers a wide range of services to a customer base which, to a large degree, is common with Port Services. Traditionally working with the chemical, automotive and steel sectors, PD Logistics is increasingly looking to increase its exposure to
Slide 11: Summary Financials
Summary Financials y/e March, £000 2004 2005 Ports 112,052 111,831 Property 8,005 8,725 Commercial vehicle sales and service 41,084 40,645 Turnover 161,141 161,201 Ports 24,492 23,712 Property 7,770 10,296 Commercial vehicle sales and service 1,071 1,078 Share of joint venture 14 19 Underlying profi
Slide 12: 3. CIF Investment highlights
3. CIF Investment highlights
Slide 13: Structure of transaction
Structure of transaction • Ownership of PD Ports via CIF2 Class A Securities Class B Securities 62.5% post 37.5% post capital capital raising raising Responsible Entity CIF1 CIF2 Manager (CLIL) (CMSL) 6.3% 5.8% 8.6% 80% 18% Wales & the North of England Arqiva West UK Gas Inexus PD Ports Gas DN DN 13
Slide 14: Returns
Returns Approximately 85% tax deferred in 2006 and 2007 CIF Other infrastructure (1) (basis issue price of $1.75) 15.00% 13.6% 10.5% 9.5% 10.00% 8.0% 5.2% 5.00% 0.00% New Class A Class A Securities - Return on Seed Other listed Other listed Securities to 30 IPO & Entitlement Assets, Inexus and regul
Slide 15: Portfolio diversification towards growth assets – post PD Ports acquisition
Portfolio diversification towards growth assets – post PD Ports acquisition CIF’s asset mix Portfolio by Asset Portfolio by Sector Portfolio by growth profile Portfolio by ownership PD Ports 15.3% Wales & the West DN UK Ports Classic utility UK Gas DNs Majority-owned Minority stake 11.1% 15.3% asset
Slide 16: 4. Consortium and CIF funding
4. Consortium and CIF funding
Slide 17: CIF funding and impact
CIF funding and impact • CIF will contribute approximately A$125m to the consortium, which it will initially fund through a combination of the proceeds from the rights issue and a bridge against the second instalment of the rights issue. • The equity bridge will be fully repaid upon receipt of the s
Slide 18: 5. Additional information
7 | ae 2 challenger Ps. Additional information
Slide 19: Quality Utility asset with growth - Inexus
Quality Utility asset with growth - Inexus Market leadership • Twice the connections of nearest competitor • 47% IGT market share and Aligned & highly experienced complete national coverage Robust growth opportunities management team • CIF has retained and incentivised • Strong order book visibility
Slide 20: Quality Telecommunication Asset – Arqiva
Quality Telecommunication Asset – Arqiva • Arqiva is one of the leading national broadcast transmission and site leasing infrastructure operators in the UK • It is also the UK’s second largest wireless site leasing operator Strong and Predictable Revenue Growth Cashflows Opportunities • Approx. 75%
Slide 21: Quality Classic Utility Assets – Gas Distribution Networks
Quality Classic Utility Assets – Gas Distribution Networks • The DNs comprise the North DN and Wales & the West DN, both of which are regulated businesses responsible for transporting gas within their regional monopolies Mature Regulatory Essential Infrastructure Environment • Highly regulated busin
Slide 22: Contact information
Contact information Challenger Infrastructure Fund Steve Bickerton Tanya Atkins Chief Executive Head of Shareholder & Media Relations Tel: 612 9994 7327 Tel: 612 9994 7125 22
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