April 19, 2007 / 2:48 PM / in 11 years

Union blasts Macquarie over Airwave pension plans

LONDON (Reuters) - Another leveraged buyout is raising union hackles as workers criticised Macquarie Bank MBL.AX over plans for Airwave’s final salary pension scheme.

The Macquarie Bank logo is displayed at the bank's offices in Sydney May 17, 2005. Another leveraged buyout is raising union hackles as workers criticised Macquarie Bank over plans for Airwave's final salary pension scheme. REUTERS/Tim Wimborne

Communication Workers Union deputy secretary general Jeannie Drake said on Thursday that unions were misled over the issue during the takeover negotiations and “a deliberate attempt was made to delay serious discussion until the sale was complete.”

She said unions registered concerns about the pension scheme during the auction of emergency ratio network Airwave O2, which was run by JPMorgan Cazenove, but at a late stage they were informed that the final salary scheme would end.

“The outrageous and disrespectful manner in which this has been handled will enrage workers and generate real concerns over the new owners of their company,” Drake said.

Macquarie said Airwave employees would no longer be part of the O2 pension scheme in six months, after which it plans to establish a new, defined contribution plan with company contributions no less than currently provided.

About 270 of Airwave’s 900 employees are expected to be moved out of the defined benefit scheme. Approximately 300 more already are enrolled in a defined contribution plan.

Two infrastructure funds operated by Australia’s Macquarie Bank said on Wednesday night they had acquired Airwave, which operates a secure digital radio network used by Britain’s police and emergency services, for 1.9 billion pounds from Spain’s Telefonica (TEF.MC).

Macquarie, one of the world’s largest owners of infrastructure assets, later said it expected revenue growth of 20-30 percent at Airwave.

It also said it had held no discussions with the CWU regarding Airwave before Wednesday because it had been engaged in a confidential sale process.

Pension issues have become a major sticking point in many UK takeovers, including the failed attempt by a group of private equity firms to buy supermarket chain J. Sainsbury (SBRY.L).

Unions also have mounted a critical tirade against the private equity business model that has drawn the attention of politicians and media, sparking a wide debate over the industry.

The Sainsbury deal significantly raised the profile of the union campaign, which was originally was sparked after CVC Capital and Permira acquired roadside assistance firm AA.

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