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Macquarie Bank and Leighton Holdings Surge After Being Named Preferred Tenderer for Mitcham-Frankston Freeway Project

Strategic Insights

— 2 min read

Shares in Macquarie Bank Ltd and Leighton Holdings Ltd surged significantly today after a consortium, in which they are members, was named the preferred tenderer for the A$2.5 billion Mitcham-Frankston freeway project. The Victorian government announced that the ConnectEast consortium, comprising Macquarie Bank, Thiess, John Holland, Alstom Australia, and Hyder Consulting, had been chosen for the design, construction, financing, operation, and maintenance of the project. This bid beat that of rival consortium, which included Transurban as a sponsor.

Key Takeaways:

  • Macquarie Bank shares rose as much as 3.3 percent to A$39.25 after the news, with a trading value of A$38.90, representing a 2.9 percent increase.
  • Leighton shares increased by 20 cents, or two percent, to A$10.07, with a significant impact on the company's stock performance.
  • The ConnectEast consortium, comprising Macquarie Bank, Thiess, John Holland, Alstom Australia, and Hyder Consulting, was named the preferred tenderer for the A$2.5 billion Mitcham-Frankston freeway project.
  • The project involves the design, construction, financing, operation, and maintenance of a 39-kilometer electronic, multi-lane, free-flow toll road from the Eastern Freeway in Melbourne's eastern suburbs to the Frankston Freeway in Melbourne's south-east.
  • The project will be designed and constructed by Thiess and John Holland, both subsidiaries of Leighton Holdings Ltd.
  • Macquarie Bank is acting as the arranger to the initial public offer (IPO) and joint lead manager with ABN AMRO Rothschild and CommSec.
  • The joint lead managers of the IPO have fully underwritten the offer, indicating a strong commitment to the project's success.
  • Macquarie is investing A$30 million in stapled units in ConnectEast Group on a deferred subscription basis, demonstrating the company's confidence in the project's viability.

Statistics:

  • A$2.5 billion: The total value of the Mitcham-Frankston freeway project.
  • 3.3 percent: The maximum increase in Macquarie Bank shares after the announcement.
  • A$1.12 billion: The amount of money to be raised by ConnectEast under an initial public offer as part of the funding for the project.
  • 39 kilometers: The length of the new toll road that will be built as part of the project.
  • 50:50 joint venture: The partnership structure between Thiess and John Holland for the design and construction of the freeway.
  • 70 percent: The ownership percentage of Leighton in John Holland.

Sources:

  • Asia Pulse, "Shares in Macquarie Bank Ltd and Leighton Holdings Ltd surge after being named preferred tenderer for Mitcham-Frankston freeway project", October 14.

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