Manchester Airport owners agree restructure to fund Stansted acquisition
Greater Manchester’s 10 councils have agreed in principle to restructure their ownership of Manchester Airport to fund a swoop for Stansted. Manchester Airports Group is seeking equity investment to give it the firepower to buy Stansted. MAG is currently owned by the 10 local authorities, with Manchester city council holding a 55% stake and the others 5% each. Proposals have been put to the Association of Greater Manchester Authorities, seeking approval for a new ownership model to be adopted if an external investor can be secured.
February 15, 2012
(Manchester Evening News)
Greater Manchester’s 10 councils have agreed in principle to restructure their ownership of Manchester Airport to fund a swoop for Stansted. Manchester Airports Group is seeking equity investment to give it the firepower to buy Stansted after current owner BAA was forced to put it on the market.
MAG is currently owned by the 10 local authorities, with Manchester city council holding a 55 per cent stake and the others five per cent each.
Proposals have been put to the Association of Greater Manchester Authorities, seeking approval for a new ownership model to be adopted if an external investor can be secured.
That would involve the councils diluting their stakes in the airport in order to bring a partner on board.
Details of the extent to which their holdings would change are not being revealed, though the M.E.N understands Manchester council would retain at least a joint majority stake.
The individual councils now need to individually give the plans the green light in the coming weeks.
It comes after MAG chief executive Charlie Cornish told the M.E.N talks are already under way with pension and infrastructure funds about possible investment. He hopes to narrow down the list of possible investors in the coming weeks and added he would consider a swoop for a European or American airport if a deal for Stansted didn’t come off.
A joint AGMA and MAG statement said the restructuring would only happen in the event of another “quality airport” coming on the market.
It added: “MAG is already key driver of jobs and growth in the north of England, but these proposals would allow the group to strengthen this position – and deliver maximum value for the local authority shareholders. “To make this possible, new governance arrangements are necessary, which each of the 10 Greater Manchester authorities would have to consider.
“The Association of Greater Manchester Authorities has agreed an in-principle framework for a new structure which will be considered by the individual local authorities over the coming weeks.
“In parallel with this process, MAG will begin to invite detailed proposals from private investors.”
15 February 2012 Last updated at 17:29
Manchester Airports Group considers takeover
Manchester Airport’s owner has said it is looking into buying another UK airport, to expand the group.
Manchester Airports Group, which also includes East Midlands, Bournemouth and Humberside, said it wanted to bring in partners to help finance the deal.
The group has not said which airports it might bid for.
But Stansted and Edinburgh airports have had to be put up for sale by their owners BAA following a ruling by the competition regulator.
The local authorities which own Manchester Airports Group are considering the recommendations, which came after a strategic review.
Manchester City Council owns 55% of the group, while the nine other Greater Manchester authorities have 5% each.
“Manchester Airports Group (MAG) is aiming high to strengthen its position as one of the leading airport operators in the country,” said a joint statement by the authorities and the airport.
“MAG is already a key driver of jobs and growth in the North of England, but these proposals would allow the group to strengthen this position – and deliver maximum value for the local authority shareholders.”
It added that it would now invite private equity investors to submit proposals for the deal. The process of choosing an investment partner is expected to take a few months.
The Competition Commission first ruled three years ago that BAA’s dominance in London and Scotland meant it must sell Gatwick, Stansted and either Glasgow or Edinburgh airports.
It has since sold Gatwick, recently said it would put Edinburgh up for sale, and has lost a long-running appeal against the sale of Stansted.
http://www.bbc.co.uk/news/business-17050143
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