JP Morgan in talks with Scots firm over airport bid

By TERRY MURDEN
Published on 11/03/2012 00:00

JP Morgan Asset Management is believed to be in talks with a Scottish company keen to support its bid for Edinburgh Airport.

It is understood the firm, whose identity is unclear, would come in as an investor and partner but would have no role in airport management.

Bids must be submitted by mid-April and three parties remain after The Scotsman disclosed yesterday that US private equity company Carlyle Group had almost certainly pulled out. Carlyle was supported by Sir Angus Grossart’s Edinburgh investment bank Noble Grossart but appears to have balked at talk of an escalation of the likely take-out price. The airport has an enterprise value of £450 million but the eventual buyer could pay as much as £600m.

Scotland on Sunday also understands that Richard Jeffrey, who was formerly the airport’s managing director and head of the city’s trams project, has joined the consortium being led by private equity group 3i. It has teamed up with M&G Infracapital and the Universities Superannuation Scheme. The third bidder is Global Infrastructure Partners, which owns Gatwick and London City airports and is being advised by Royal Bank of Scotland. Around 50 parties expressed initial interest.

Industry sources said JP Morgan Asset Management would bid through its infrastructure fund and was likely to turn for advice to Kevin Brown, who resigned as Edinburgh Airport boss last summer to take over at Cairns and Mackay airports in Australia, owned by JP Morgan. It invests in a range of infrastructure from gas plants to wind farms and is regarded as a long-term holder of assets.

BAA, owned by the Spanish conglomerate Ferrovial, chose to sell Edinburgh over Glasgow after being ordered to offload one of them to meet the requirements of a Competition Commission investigation. BAA is being advised by Citi, BNP Paribas and Ernst & Young.

Industry sources believe buyers would be prepared to pay a premium for Edinburgh as it is seen to have good cash flow and potential for growth.