BRITISH AIRPORTS operator BAA is putting its London Gatwick airport up for sale, but says it will resist regulatory pressure to sell other parts of its portfolio.
"We have decided to begin the process of selling Gatwick airport immediately," Colin Matthews, chief executive of BAA, which is owned by Spain's Ferrovial, told reporters in Toronto.
Some in the industry have said Gatwick, one of Europe's busiest airports, serving 35 million passengers a year, could fetch £2 billion to £3 billion (€2.5 billion to €3.8 billion).
A BAA spokesman said the deal process was at an early stage, with the company yet to appoint advisers or evaluate any of several expressions of interest received.
Virgin Atlantic said it was interested in bidding as part of a consortium, while German builder Hochtief added it was "considering getting involved" in the sale process. Frankfurt operator Fraport said it remained interested in London airports.
A spokesman for Manchester Airports Group said it would consider a possible bid if it added value for shareholders, while an industry source said it was "logical" that Global Infrastructure Partners, the consortium that owns London City Airport, would also consider a deal. Singapore-owned Changi Airports International has declared an interest in the past, but was not immediately available for comment yesterday.
Analysts at Collins Stewart, however, said they would be wary of factoring in a sale price above £2 billion, pointing out that the value of the airport's assets, as calculated by regulators, was just over £1.5 billion.
"Ferrovial bulls think up to £3 billion could be achievable, based on 'unregulated' peak-cycle values . . . We think this is unlikely," said the analysts, who have a "sell" recommendation on Ferrovial shares.
"[We] see this sale as an indictment of a failed expansion strategy which leaves the group overloaded with debt at a time when cyclical pressures are bearing down across its operations."
The sale is a response to the UK Competition Commission, which last month said in a provisional ruling that BAA must sell three of its seven UK airports, including two of London's Heathrow, Gatwick and Stansted, and one of Edinburgh and Glasgow in Scotland. BAA said it disagreed with the commission's analysis and would try to keep all six of its remaining airports after the Gatwick sale.
- (Reuters)
