Canadian hedge fund West Face Capital is pushing SNC-Lavalin Group Inc to sell its stake in Ontario’s 407 toll highway, a move that could fetch the engineering and construction company more than $5 billion (US$3.83 billion), according to two sources familiar with the process.
West Face is an SNC shareholder but has not disclosed the size of its holding. SNC owns about 17 per cent of Highway 407.
Stretching from the Ontario cities of Burlington to Pickering, the 407 is a 108-kilometre electronic toll highway that runs north of Toronto. It is in the midst of expansion projects, resulting in an attractive growth profile and increasing value.
Other investors in the 407 are Cintra Infraestructuras Internacional SL, a unit of Ferrovial SA, and Canada Pension Plan Investment Board.
SNC could begin the process of selling its 407 stake as early as later this year, said the sources, who declined to be identified because the matter is not yet public.
SNC did not immediately respond to a request for comment, and West Face declined comment.
By John Tilak
(With additional reporting by Allison Lampert in Montréal and Matt Scuffham in Toronto; Editing by Cynthia Osterman)