GIP confirms plans to bid for Gatwick Airport
London City Airport owner Global Infrastructure Partners (GIP) will make a bid for Gatwick Airport.
GIP, a joint venture between General Electric and Credit Suisse, is the first party to confirm a bid for Gatwick, put up for sale by Spain's Ferrovial last year.
"I can confirm a bid is going in today, and will be by the deadline," a GIP spokesman said, although he would not say how much was being offered or whether GIP had any bidding partners.
Sources familiar with the matter said that Deutsche Bank's RREEF Infrastructure will also lodge a bid, in partnership with Australia's Babcock and Brown.
Both RREEF and Babcock and Brown declined to comment. Gatwick is part of Ferrovial's seven-airport monopoly BAA, which Britain's competition regulators have proposed should be broken up. Analysts have said the Gatwick sale could net its debt-laden owner up to £2 billion (Dh10.7bn).
A spokesman for Ferrovial's British airports arm BAA confirmed that first-round bids for the airport, but declined to comment further on the process.
BAA Chief Executive Colin Matthews said last week that there had been "serious interest" in Gatwick, and a string of other consortia are expected to follow GIP into the bidding contest.
Manchester Airport Group, 3i Infrastructure and Germany's Hochtief have all said they would look at a bid, while press reports have said a fund run by Citigroup is also a leading contender. However, Frankfurt Airport-owner Fraport said it would not be making an offer.
The potential value of bids has been estimated at around £2bn, although analysts have cautioned that a premium to the Regulated Asset Base (RAB) – a way of valuing infrastructure assets – of £1.7bn may be difficult.
"It remains to be seen whether £2bn will be achievable... given that traffic at the airport is in free-fall and given the continuing difficult state of the credit markets," Collins Stewart aviation analyst Andrew Fitchie said.
BAA said passenger numbers at Gatwick, normally at around 35 million a year, fell 13.8 per cent year-on-year in December.
Ferrovial put Gatwick up for sale to pre-empt a likely order to do so by Britain's Competition Commission later this year.
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