Hochtief drops Gatwick bid as first round ends

26.1.2009   (International Herald Tribune)

German construction company Hochtief has pulled out of the bidding for London’s
Gatwick airport, leaving five suitors to enter a second round, a person familiar
with the process  said.

“It wasn’t a question of valuation, but the deliverability of the proposal,”
the source told Reuters on Monday, declining to be more  specific.

Gatwick was put up for sale late last year by Spain’s Ferrovial under pressure
from  regulators.

First-round bids for the airport — one of the seven British airports in Ferrovial’s
BAA group — were due in last  week.

BAA declined to comment and Hochtief was not immediately reachable for  comment.

Analysts have said bids could be up to about 2 billion pounds, though tough credit
markets and a plunge in passenger numbers could mean a premium to the Regulated
Asset Base (RAB) — a way of valuing infrastructure assets — of 1.7 billion pounds
may be difficult to  reach.

The source also said that two of the bidders were Manchester Airports Group, bidding with Canada’s Borealis; and 3i’s infrastructure arm, in partnership with Ontario Teachers’ Pension Plan and the Canada Pension  Plan.

These two had previously declined to confirm that they were taking part in the
auction. Three other groups have publicly said they are part of the  process:

Global Infrastructure Partners (GIP);

Deutsche Bank’s RREEF Infrastructure and a European infrastructure fund run by Babcock &  Brown;

Citigroup unit Citi Infrastructure Investors, Vancouver Airport Services and John Hancock Life Insurance Company, who are
bidding jointly as the Lysander Gatwick Investment  Group.

(Reporting by Quentin Webb, Editing by Douwe Miedema, Leslie  Gevirtz)