Bloomberg News

BAA Edinburgh Airport Sale Lures Gatwick, Manchester Owners

October 21, 2011

(Updates with comment from analyst in fourth paragraph.)

Oct. 21 (Bloomberg) -- Edinburgh airport, which BAA Ltd. said this week will be sold following pressure from regulators, is attracting interest from Global Infrastructure Partners Ltd. and Manchester Airports Group, its owner’s chief U.K. rivals.

GIP knows Edinburgh well and is interested in a purchase, according to a person familiar with its strategy who declined to be identified because nothing has been made public. Manchester Airports will look at an acquisition that would deliver investor value, spokesman John Greenway said in an e-mail.

Among overseas companies, Aeroports de Paris, the operator of Paris Charles de Gaulle, Europe’s busiest airport after Heathrow, expressed an interest while cautioning that it’s too early to say if it will bid. Fraport AG, owner of Frankfurt airport, the regional No. 3, also wants to add to its portfolio, a person familiar with the company’s thinking said.

“It looks like being a well-contested race,” said John Strickland, an aviation analyst at JLS Consulting in London. “This isn’t just any old terminal, it’s Scotland’s blue-ribbon airport. Edinburgh is unusual in the U.K. for being a draw for inbound tourism, which isn’t common outside of London.”

Gatwick Gone

BAA, Britain’s biggest airport operator, plans to auction the Edinburgh terminal next year in a sale that may fetch 600 million pounds ($957 million), according to analysts. The owner of London Heathrow has already sold the U.K. capital’s Gatwick airport to GIP and may also be required to sell nearby Stansted.

U.S. infrastructure fund GIP also owns the London City terminal serving the capital’s financial district and ranks as Britain’s second-biggest airport operator. Manchester, the U.K. No. 3, runs East Midlands, Humberside and Bournemouth airports, as well as its namesake site, and is owned by the 10 boroughs of Greater Manchester in northern England.

BAA, controlled by Spanish builder and infrastructure operator Ferrovial SA, lost an appeal in July against a U.K. Competition Commission ruling ordering its breakup. Ferrovial closed 1.8 percent higher in Madrid, while Fraport rose 2.5 percent and ADP added 2.4 percent.

France’s Vinci SA, Europe’s biggest builder and said to be among the bidders for the airport assets of German rival Hochtief AG, isn’t interested in Edinburgh “at this juncture,” spokeswoman Estelle Ferron said in an e-mail. Its stock advanced 2.1 percent today.

--Editors: Christian Nicholson, Chris Jasper.

To contact the reporters on this story: Steven Rothwell in New York at cnicholson22@bloomberg.net; Alex Webb in Frankfurt awebb25@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net; Jacqueline Simmons at jackiem@bloomberg.net


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