Financier Dermot Desmond could have netted up to €960 million from the sale of London City Airport to a US-led consortium, according to some reports yesterday.
He sold the airport yesterday to a consortium comprising AIG, the US financial services group, and Global Infrastructure Partners, a joint venture between Credit Suisse and General Electric's GE Infrastructure fund.
The deal placed an enterprise value of about €1.1 billion (£750 million) on the business, well above early analysts' estimates.
According to some estimates,Mr Desmond made about €960 million from the deal. He bought the airport for only €35 million in 1995 from its builder, Mowlem, the UK construction group.
AIG trumped competing offers from groups including Sacyr Vallehermoso, the Spanish infrastructure concern teamed with Axa, the French insurer; Fraport, the Frankfurt airport group, with Deutsche Bank infrastructure funds; and Balfour Beatty partnered at one point with Merrill Lynch.
London City is the niche business travel airport at the heart of London's Docklands. It is only six miles to the east of the City of London and two miles east of Canary Wharf. Mowlem opened it in 1987.
It racked up losses for the construction group in the early years, but began to expand in the second half of the 1990s after the construction group had sold out to Mr Desmond.
Passenger numbers have almost quadrupled from 556,000 in 1995 to two million in 2005, while the number of take-offs and landings has risen from 18,434 to 70,912 in the same period.
The airport has become one of the most popular destinations in southeast England for private and corporate jets. In 2012, it will be the closest airport to the London Olympics.
A plan published this year foresees passenger volumes again quadrupling to eight million by 2030, and take-offs and landings rising from 71,000 a year to 170,000 in the same period.
Mr Desmond's other interests include the largest shareholding in Glasgow Celtic football club, online gambling with the Betdaq betting exchange, a majority stake in biometrics company Daon and share in Sandy Lane Hotel, Barbados.
He is an active investor in Irish and international companies through this Dublin-based vehicle, International Investment and Underwriting (IIU). He also has a stake in the Sporting Emporium casino in Dublin.
The ownership of all five London airports has changed hands in the space of two years.
This summer, BAA, owner of Gatwick, Heathrow and Stansted, was bought by a consortium led by Ferrovial of Spain, which is involved in a number of road-building and other projects in the Republic. The deal for BAA valued the equity at €15 billion and gave the group an enterprise value of €24 billion.
In early 2005, TBI, which owned London Luton airport, was taken over by Abertis Infraestructuras, the leading Spanish infrastructure operator, and Aena, the Spanish state-owned airports group, in a deal that valued the group, which included Belfast International and Cardiff airports, at €800 million.
Airports attract infrastructure funds because they have stable, long-term revenues that match their liabilities.
