Six Bidders for Gatwick

UK airports operator BAA and owner Ferrovial have received at least six indicative bids for the acquisition of London Gatwick airport, although any winning bid is likely to fall short of the expected £2bn price tag.

Bidders include Global Infrastructure Partners, a private equity infrastructure fund and owner of London City airport, advised by Credit Suisse and JPMorgan; a consortium fronted by Ontario Teachers and Pension Plan and 3i Infrastructure, advised by Macquarie and Rothschild.

Lysander Gatwick Investment, comprising Citi Infrastructure Investors, Canada’s Vancouver Airport Services and John Hancock Life Insurance, advised by Santander; Gatwick Future Partnership, fronted by Babcock & Brown’s European infrastructure fund and Deutsche Bank’s infrastructure fund, RREEF, advised by Deloitte, Cameron McKenna and Arup.

The other two bidders are Manchester Airport Group, in tandem with Canada’s Borealis fund, advised by Dresdner Kleinwort, and Hochtief AirPort construction group.

Sovereign wealth fund Abu Dhabi Investment Authority (ADIA) is understood to have dropped out, after having initial conversations with other interested parties regarding joining one of the bidding consortiums. Virgin Atlantic and easyJet were also involved in earlier negotiations.

The FT reports that bids received yesterday were likely to be depressed due to difficulties in debt financing and falling revenues from passenger traffic.

Despite an original price tag of £2bn, indicative offers are likely to be in the range of £1.7bn to £1.8bn, with part of the drop blamed on terms of the debt package being put together by RBS and HSBC.

Source: Thomson Merger News