Gatwick sale stalls

GATWICK’S sale by BAA is still stalled after the two leading bidders have walked away from the negotiating table.

BAA had originally asked for £1.8 billion (US$2.9 billion) but lowered that to £1.5 billion ($2.47 billion) when no one was biting. However, the leading bidder – made up of Manchester Airports Group (MAG) and Canada’s Borealis – refused to raise its offer from £1.4 billon ($2.3 billon). The next leading bidder – the Global Infrastructure Partners (GIP) consortium, a joint venture between Credit Suisse and General Electric – also refused to raise its offer.

BAA deny that the two have finished negotiations and says that “there are multiple bidders still in the process.”

The third main party – the Lysander consortium led by Citigroup – was removed from the potential sale in May for offering too little.

The bidding hasn’t been helped by figures showing that Gatwick’s cargo traffic fell 45.5 per cent for the year to date compared to 2008 – only 34,000 tonnes.

BAA was ordered to sell Gatwick, Stansted and either Edinburgh or Glasgow airports within two years by the UK’s competition commission, shortly after Ferrovial bought BAA. Ferrovial went heavily into debt to buy BAA for £10.3bn in 2006. In 2007, the interest on the debt was equal to half of the company’s annual profits.