Stansted to be sold for £1.5bn to Manchester Airports Group
Stansted to be sold for £1.5bn to Manchester Airports Group
“Manchester airports said that it had detailed a integration plan in place to ensure a seamless transition of ownership and operations at Stansted, which will maintain business as usual for passengers and customers.
…in the 12 months to March last year MAG’s passenger numbers rose by a total of 6.7% and revenues by 8.6%. Underlying operating profit was up by 26%.
Industry Funds Management has investments in 9 airports across Australia, including 5 state capital city hubs. In Britain it already has significant investments in Anglian Water, the 4th-largest water and sewerage company in England and Wales, and Arqiva, the broadcast and wireless communications infrastructure company.”
More on IFM Infrastructure Funds at http://www.industryfundsmanagement.eu/ifm-infrastructure-funds/infrastructure-funds/#global-infrastructure-fund
This is what they invest in in Europe http://www.industryfundsmanagement.eu/ifm-infrastructure-funds/asset-portfolio/asset-portfolio-europe/ They seem to only have 4 things, 2 of them in the UK. They recently got out of Wales & West Utilities.
By contrast, in April 2012 Edinburgh Airport was sold to Global Infrastructure Partners for £807m Details
in October 2009 Gatwick Airport was sold to an entity controlled by Global Infrastructure Partners for £1.51 billion. Details
Update from Stop Stansted Expansion (SSE) on 22nd January:
Second runway threat may lessen under new owner
Stop Stansted Expansion is assessing the likely implications for expansion at Stansted Airport following its acquisition by Manchester Airports Group (MAG). The group, in conjunction with Australia’s Industry Funds Management, beat two other suitors with a £1.5 billion bid for the airport. MAG owns East Midlands and Bournemouth airports as well as Manchester.
Welcoming the announcement, SSE Chairman Peter Sanders commented: “Our hope is that we can build a constructive relationship with Stansted’s new owners based on maximising the benefits of the airport and minimising its adverse impacts”.
In a preliminary assessment of the likely prospects for Stansted under new owners, Brian Ross SSE’s economics adviser, said: “We think it unlikely that MAG will pursue the idea of a second runway. They got their fingers burnt 15 years ago when they built a second runway at Manchester which, as it turned out, they didn’t need.”
Manchester is similar in size to Stansted and recently pushed the Essex airport into fourth place in the UK’s airports league table based on passenger numbers.
Brian Ross told the Times, “Charlie Cornish [MAG’s chief executive] recently said he wanted to return Stansted to its 2007 peak [24 million passengers a year] within ten years and that is something we can work with them constructively on. That seems to be a realistic ambition and could be sustainable.”
Mr Cornish said MAG would use its expertise to ensure that Stansted “can fulfil its potential as a high-quality alternative London access point for global air travellers. Stansted has scope to benefit from significant volume growth over the short, medium and long term.”
“More flights to interesting places” – Simon Calder
Of the four London airports, Stansted is furthest from the centre and furthest from key road and rail arteries, says Simon Calder, the Independent’s travel editor, in an article discussing the implications of Stansted’s new ownership. “It’s only a little bit unfair to describe it as an airport people use because they have to,” he said. “Manchester Airports Group will be seeking to change all that.” He predicted that passengers would notice “more flights to more interesting places – and a wider range of airlines”. It was unhealthy for Stansted to be so dependent on Ryanair. Long-haul airlines at Stansted had come and gone but if it could find the right airline that needed a fast track to London, “Heathrow and Gatwick will take notice”. Initially, new owners would try to grab short-haul routes from Gatwick and Luton, he said.
Manchester Council to cut share in MAG from 55% to 35.5% and 9 other councils cut theirs from 45% to 29%
Date added: January 22, 2013
The Manchester Evening News looked at the recent purchase of Stansted airport, by MAG, and assessed what this means for Manchester taxpayer, Manchester airport and the region. 10 councils currently own MAG and they have not had to pay anything towards the deal. The cash has been raised through a combination of MAG selling a 35.5% stake in itself to IFM and agreeing a new debt package with its banks. The deal will see Manchester Council reduce its stake in MAG from 55% to 35.5%. The other 9 councils, which currently have a 5% stake each, will share equally the remaining 29% of MAG. After buying Stansted, MAG will control nearly 19% of the UK aviation market, and this may strengthen its bargaining power when negotiating with airlines. The 10 councils hope to get a larger annual dividend now. In 2012, £20m was paid out, of which £11m went to Manchester and £1m each to the other 9 councils. MAG hopes to increase profits at Stansted, which is operating now at 47% of capacity, by increasing income from shops, restaurants and bars.
Which has more passengers now? MAG? Heathrow Airport Holdings? GIP?
Very approximately, from CAA data at showing numbers of passengers
81 million passengers or so at Heathrow’s 4 airports in 2011 (Heathrow, Glasgow, Aberdeen, Southampton)
41 million or so at the MAG 4 airports in 2011 (Stansted, Manchester, East Midlands, Bournemouth)
46 million or so at the GIP’s 3 airports in 2011 (Gatwick, Edinburgh, London City)
2 days earlier on 16th January 2013:
3 bids submitted for Stansted with sale decision possible soon
Bids for Stansted are now in, and there have been three. Each bid is for around £1 billion or more. Stansted is now the UK’s 4th largest airport, by passenger numbers, after Manchester, and has mainly leisure and holiday flights, with Ryanair predominant. It was the 3rd largest till last year. The final bidders are: Australia’s Macquarie. Malaysia Airports Holdings and Manchester Airports Group (MAG) with its Australian partner IFM. The decision on which has won may be know by next week. Stansted was not seen as easy to sell because Ryanair accounts for about 70% of the airport’s traffic. The airline’s combative approach to pricing is expected to drag down the deal’s value well below other recently sold airports such as Gatwick and Edinburgh. “It’s a miracle they got three bids”, said one of the bidders. “The Ryanair risk is not for the fainthearted”. MAG is seen as the front-runner, and may be best at dealing with Ryanair from experience at its other UK airports.
Stansted airport attracts three $1.6 billion bids
Jan 16, 2013 (Reuters)
London’s Stansted airport has attracted three final bids each worth about £1 billion, three sources close to the matter said.
A deal would give its new owner access to Britain’s fourth largest airport, which flew 17.4 million passengers last year.
“We are hopeful we’ll have a deal next week”, said one of the people who didn’t want to be named because the talks are private.
Private equity firm TPG and New Zealand investment manager Morrison & Co were previously interested in Stansted but did not submit bids.
Stansted was not seen as an easy deal to sell because low-cost Irish carrier Ryanair (RYA.I) accounts for about 70 percent of the airport’s traffic. The airline’s combative approach to pricing is expected to drag down the deal’s value well below other recently sold airports such as Gatwick and Edinburgh.
“It’s a miracle they got three bids”, said one of the people.
“It’s indicative of how difficult it is to invest in quality assets at the moment…. The ryanair risk is not for the fainthearted”.
MAG is seen as the frontrunner, given its sector expertise and financial firepower due to its partnership with IFM, which took a 35 percent stake the operator earlier this year.
Macquarie, which owns Sydney’s airport, also has expertise in buying airports, and Malaysia Airports has the financial firepower, a sector banker said.
“It’s all down to who will put the highest bid”, the banker said.
This banker did not expect Stansted to fetch similar multiples to Edinburgh Airport and Portugal‘s ANA, which were recently sold 16 times and 15 times earnings before interest, taxes, depreciation and amortisation (EBITDA).
However, some analysts say Stansted could fetch up to £1.3 billion.
RBC Capital analyst Olivia Peters says Stansted could be sold for 95% of its regulated asset base (RAB) – around 1.28 billion pounds, or around 14.2 times its annual earnings before interest, taxes, depreciation and amortisation (EBITDA).
Stansted’s owner Heathrow Airport Holdings, Macquarie and MAG declined to comment while Malaysia Airports could not be reached outside of office hours.
(Reporting by Anjuli Davies and Sophie Sassard; Editing by Steve Slater and Louise Heavens)
The Financial Times says:
January 16, 2013
The MAG consortium has been seen as a leading contender. MAG owns Manchester, East Midlands and Bournemouth airports. Under the terms of their partnership deal, Industry Funds Management will buy 35% of MAG’s equity and get half its voting rights if the pair win Stansted.
MAG might be better positioned than others to negotiate with Michael O’Leary, Ryanair’s chief executive, given its extensive dealings with the low-cost airline at its airports.
Regulated airports such as Stansted, which analysts say could fetch about £1bn, are a rare prize and appeal to investors looking for safe, inflation-pegged returns.