SNC-Lavalin terminates the Highway 407 ETR transaction with OMERS
Shareholders challenge SNC-Lavalin for their stake in the all-electronic, open-access toll highway
MONTREAL – SNC-Lavalin has cancelled the pending sale of 10.01% of the shares of 407 International Inc. to OMERS, subject to later payment of a break fee.
SNC-Lavalin announced on April 5 that the company initially entered into an agreement with OMERS, one of Canada’s largest defined benefit pension plans, to sell to it 10.01% of the shares it holds in Highway 407 ETR. The purchase price consists of an upfront payment of C$3.0 billion. The sale would also be subject to certain shareholders’ rights, including rights of first refusal in favour of certain other shareholders of Highway 407 ETR.
Current shareholders consist of a subsidiary of Cintra Global S.E. – a subsidiary of Ferrovial S.A. which owns 43.23% of the shares of Highway 407 ETR – and with indirectly owned subsidiaries of Canada Pension Plan Investment Board and SNC-Lavalin respectively owning 40% and 16.77% of the shares of Highway 407 ETR.
SNC-Lavalin notes in a press release that it terminated the transaction with OMERS after CPPIB shareholders exercised its rights of first refusal.
Subsequently, Cintra Global S.E., a subsidiary of Ferrovial S.A. which owns 43.23% of the shares of Highway 407 ETR, also sought to exercise its rights of first refusal.
SNC-Lavalin states that it disputes Cintra’s ability to do so under the circumstances.
Cintra has informed SNC-Lavalin of its intention to commence an application in the Ontario Superior Court, Commercial List, to determine its right to exercise its right of first refusal. A hearing date is scheduled for June 21.
The parties have agreed that irrespective of the outcome, and following the Court’s decision, SNC-Lavalin will be permitted to sell to CPPIB, or to CPPIB and Cintra shareholders pro rata to their current share ownership in Highway 407 ETR.