More Heathrow shareholders plan to sell stakes alongside Ferrovial
Ferrovial agreed to sell its 25% stake in Heathrow in November for £2.4bn to French private equity company Ardian (15%) and the Saudi Public Investment Fund (10%). Now 3 other Heathrow shareholders that together own 35% of the airport, have said they want to sell out too, as part of £2.4bn Ferrovial deal agreed. It has been suggested, by someone in the know, that Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Singapore sovereign wealth fund GIC and the UK’s Universities Superannuation Scheme all intend to exit. So with 25% and 35%, that is 60% of Heathrow’s ownership. As part of the Ferrovial deal, the airport’s other shareholders were given the option to sell their own stakes at the same valuation, with the Saudis and Ardian offered first refusal. This could be a problem for the Ferrovial sale, and the £2.4bn deal could collapse if all the shareholders cannot find buyers. Ferrovial said it was a “condition” of the transaction that the “tagged shares” were also sold. Neither Ardian nor the Saudis are compelled to buy the new shares on offer. The Saudis don’t want more than 10%. They might be able to find a 3rd investor to come in and buy the 35%.
.
Tweet
More Heathrow shareholders plan to sell stakes alongside Ferrovial
USS, Canada’s CDPQ and Singapore’s GIC push to exit, putting £2.4bn deal with Saudis and private equity at risk
By Philip Georgiadis in London (FT)
JANUARY 16 2024
Ferrovial agreed to sell its 25% stake in the UK’s biggest airport last November for £2.4bn to French private equity company Ardian and the Saudi Public Investment Fund.
Three shareholders in Heathrow that between them own more than a third of the London airport have said they want to sell out alongside majority owner Ferrovial, according to the infrastructure group, as part of £2.4bn deal agreed last year.
Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), Singapore sovereign wealth fund GIC and the UK’s Universities Superannuation Scheme all intend to exit, according to a person familiar with the deal.
Ferrovial did not name the trio, and all three companies declined to comment.
Ferrovial agreed to sell its 25% stake in the UK’s biggest airport in November for £2.4bn to French private equity company Ardian and the Saudi Public Investment Fund, ending 17 years of ownership.
As part of that deal, the airport’s other shareholders were given the option to sell their own stakes at the same valuation, with the Saudis and Ardian offered first refusal. Ardian originally agreed to buy 15% and the Saudis 10%.
On Tuesday, Ferrovial said that other shareholders that between them owned 35% of the London airport had decided to exercise their “tag-along” rights, throwing a potential roadblock in the way of the transaction.
With 60% of the airport now involved in the sale process, the £2.4bn deal could collapse if all the shareholders cannot find buyers.
Ferrovial added it was a “condition” of the transaction that the “tagged shares” were also sold.
Neither Ardian nor the Saudis are compelled to buy the new shares on offer. The Saudis plan to stick with their original plan to buy 10% and do not want to increase their stake in the airport beyond this, according to a person familiar with the deal. Ardian is considering raising its offer, the person said.
Another option being considered is for the Saudis and Ardian to find a third investor to come on board to take the fresh stakes.
The change in ownership would represent one of the biggest shake-ups in Heathrow’s boardroom since it was privatised under the Thatcher government in the 1980s.
Any new investors will buy into an asset that has been lossmaking for three years because of the coronavirus pandemic and travel restrictions, but with a history of generating strong returns for shareholders.
Still, plans to build a third runway to generate significant new growth have stalled amid high inflation and rising interest rates.
Heathrow’s management has instead been exploring less radical options to increase passenger numbers, such as upgrading terminals and its road links, the Financial Times reported last month.
https://www.ft.com/content/2cebd6e9-4667-4141-8beb-43f5feec1a9f
.
See earlier:
Ferrovial to sell its 25% stake in Heathrow for $3 billion to Ardian (15%) and Saudi Arabia’s PIF (10%)
Infrastructure giant Ferrovial has reached an agreement with two different buyers to sell its entire 25% stake in Britain’s busiest airport, Heathrow, for £2.37 billion ($3.01 billion) the company said in a statement on Tuesday. Ferrovial said the buyers for the stake in FGP Topco – the parent company of Heathrow Airport Holdings Ltd – were private equity fund Ardian and Saudi Arabia’s Public Investment Fund (PIF). Ardian would acquire a 15% stake and PIF a 10% stake. The transaction is subject to regulatory conditions and must comply with the right of first offer and full tag-along rights, which may be exercised by the other FGP Topco shareholders, Ferrovial added. Ferrovial expects to complete the sale by mid-2024. Ferrovial also has a 50% stake in three other British hubs: Aberdeen, Glasgow and Southampton. It also has a 49% stake in the new Terminal One at New York City’s JFK airport.
Click here to view full story…
.
.