MAG could consider other acquisitions if it fails to buy Stansted.
Manchester Airports Group could consider a swoop for a European or American airport if it fails to buy Stansted. The 10 Greater Manchester councils, which jointly own MAG, will be asked in the coming weeks to approve plans to seek external investment to fund a potential acquisition. Talks are already under way with potential investors and MAG hopes to narrow down the list of serious contenders over the next couple of months. MAG is not looking at a Scottish airport but is looking at Stansted “in some detail,” due to its similarity in size to Manchester and its potential for further growth.
February 09, 2012
(Manchester Evening News)
The 10 Greater Manchester councils, which jointly own MAG, will be asked in the coming weeks to approve plans to seek external investment to fund a potential acquisition.
Chief executive Charlie Cornish told the M.E.N talks are already under way with potential investors and he hopes to narrow down the list of serious contenders over the next couple of months.
Operator BAA has been told by the Competition Commission it must sell Edinburgh or Glasgow airport, though it could lodge a further appeal against the ruling.
Mr Cornish said he had ruled out a swoop for a Scottish gateway but that he was looking at Stansted “in some detail,” due to its similarity in size to Manchester and its potential for further growth.
He added he is determined to sort out the way in which MAG could be refinanced to fund an acquisition now, so it can act quickly when Stansted comes to the market and avoid a repeat of the scenario that saw the group miss out on a swoop for Gatwick in 2009.
Last month, it emerged MAG was carrying out a strategic review of the business, in order to explore ways of attracting equity investment for the purposes of an acquisition.
That would involve the 10 Greater Manchester councils diluting their stakes in the group, which would see its annual revenues grow by 80 per cent if it bought Stansted. The MEN understands the local authorities will be asked to approve plans to press ahead with the move in the next few weeks. Manchester city council currently owns 55 per cent of MAG, with the other nine councils holding five per cent each. It is understood Manchester city council would remain a majority shareholder under any new structure being considered.
Mr Cornish said MAG had been approached by a number of pension and infrastructure funds interested in discussing investment opportunities and he hoped to narrow down the frontrunners in the coming weeks.
On the benefits of moving for Stansted, he said: “If you look at all the London airports, they will all fill up over the next 10 to 20 years. Currently, Stansted is 61 per cent utilised, so there is still plenty of growth potential.
“It has about 18m passengers a year, so it has the potential to grow with the right commercial approach and with the relationships we can introduce through Manchester and East Midlands.
“Having another quality airport in the group, in terms of scale to Manchester, will bring a better balance to the group.”
Mr Cornish said Stansted was the only realistic UK-based airport the group would look at, meaning he would look overseas for other opportunities, adding any potential alternative swoop would be “in the west.”
He said: “If something else pops up, we will always have a look at it but it would always have to be of the right scale.
“If Stansted doesn’t end up coming to the market, we will just carry on having a look at any other opportunities.
“In the UK, there is only Gatwick and Stansted but there are lots of other potential opportunities in other countries but it would have to be something of a similar scale to Manchester, in terms of size and passenger numbers.”