BAA expects high level of interest for Edinburgh

EDINBURGH Airport is expected to attract a robust level of interest from the UK and overseas after its owner announced yesterday that it would be put up for sale.

A Scottish bid for the airport of between £500 million and £600m was yesterday said to be gathering support as talks continued with businessmen keen to join a consortium and institutions willing to help fund an offer.

BAA surprised the markets by putting Edinburgh Airport on the auction block against expectations that it would sell Glasgow.

The company decided that Edinburgh could extract a better price and a healthy list of bidders, given its recent and forecast passenger growth.

Edinburgh is the largest airport in Scotland, with a 9.5 per cent increase in passenger numbers so far this calendar year. Its prospects are likely to draw attention from infrastructure companies and existing airport operators, as well pension funds and private equity buyers.

Among the early contenders is Manchester Airport Group, owned by the ten local authorities in Greater Manchester and which also owns East Midlands, Bournemouth and Humberside.

Others tipped to join the bidding are: Peel Holdings; Borealis Infrastructure of Canada and Australia’s Macquarie. TAV, the Turkish-headquartered operator, and YVRAS, the owner of Vancouver are other potential buyers. But sources have disclosed to The Scotsman that Global Infrastructure Partners, which bought Gatwick from BAA and also owns London City, is not likely to bid.

Scotland on Sunday revealed at the weekend that a consortium of Scottish businessmen is being assembled, led by investment banker Ben Thomson and former Edinburgh Airport managing director Richard Jeffrey.

A source familiar with the plan said conversations were going on “every day”. Neither Thomson nor Jeffrey were prepared to comment.

Colin Matthews, BAA chief executive, speaking in Edinburgh yesterday, said he would have preferred not to sell airports, but had been obliged to do so. “The reason we have chosen Edinburgh is pretty straightforward: even through tough economic times, Edinburgh has been thriving.”

The sale process, prompted by the Competition Commission ordering BAA to sell some of its assets, will kick off in the new year, with a shortlist due in the spring and completion of a deal by the summer.

“We want a transaction that will be relatively quick,” said Matthews. “We expect a good price and a good auction process.”

He said that there would be no change in the investment plans for any of BAA’s Scottish airports, which includes Aberdeen, and that Edinburgh would be sold “in the best possible condition”.

There had been no external pressure to sell Edinburgh and the company had not tested the water with potential buyers to determine which airport they would prefer to buy.