Ferrovial receives depressed bids for Gatwick

28.4.2009   (Financial Times)

By Kevin Done, Aerospace Correspondent
    See also below, late bid by Lysander Gatwick Investment group

Ferrovial received at least two bids for Gatwick airport on Monday as the first
part of the forced break-up of BAA, its UK airports subsidiary, entered a decisive

The offer prices, estimated by analysts to be in the range of £1.3bn to £1.5bn,
were well below the Spanish infrastructure group’s expectations of last September,
when it announced the sale of the UK’s second-largest airport with the hope of
attracting bids in the range of £1.8bn to £2bn.

It remained unclear Monday night when a third expected bid from a consortium
led by Citi Infrastructure Investors would materialise, although it appeared that
BAA was prepared to stretch its deadline for latecomers.

The GIP fund, which has Credit Suisse and General Electric as its founding investors,
already owns 75% of London City airport.     Its banking consortium is led by Credit
Suisse, JPMorgan and Royal Bank of Canada.

MAG, which is owned by the 10 local authorities of Greater Manchester, has teamed
up with Borealis, the Canadian infrastructure fund, which will be lead equity
investor, and the Greater Manchester Pension Fund. It is being advised by Dresdner
Kleinwort, with Barclays Capital leading its banking consortium.

Both GIP and MAG have had their bids reviewed privately by credit rating agencies
and have been forced to reduce the level of debt and increase the share of equity
in their bids, so lowering the offer prices, in order to attract potential triple
B plus credit ratings.

The third potential bidder, Lysander Gatwick Investment, consists of Citi Infrastructure Investors, Canada’s Vancouver Airport Services
and John Hancock Life Insurance of the US.

Lysander Gatwick Investment suffered an embarrassing and expensive setback last
week, when it failed to raise the financing to support its high $2.5bn ( £1.7bn)
bid, which won the contest for Chicago Midway airport in the US last September.

The break-up of BAA, which controls the most UK airport traffic and owns the
three leading London airports, Heathrow, Gatwick and Stansted, as well as the
two biggest Scottish airports, Edinburgh and Glasgow, is being forced by the UK
competition watchdog.

The Competition Commission last month demanded that BAA, which controls seven
UK airports and is a majority-owned subsidiary of Spain’s Ferrovial, should sell
Gatwick, Stansted and one of either Glasgow or Edinburgh airports within two years
in order to improve competition in the UK airports sector.



see also


Late arrival lands bid for Gatwick – Lysander

Date Added: 30th April 2009

Lysander Gatwick Investment Group – a consortium of Citigroup infrastructure
fund, Vancouver Airport and John Hancock Life Insurance Co, is reported to have
belatedly submitted a bid for Gatwick Airport. BAA is reported to have received
the bid on Tuesday afternoon 24 hours after the original deadline for offers had
closed. (Crains)     Click here to view full story…