BAA puts Gatwick up for sale

Im hopping that FraPort continue to bid, i really would love to see what they can do for our shopping center!!

Josh

Glasgow next ?

Quite probably, they have a distinct preference for EDI staying in the family!

I think it’s very interesting that they’ve put LGW on the market now. The process is going to take some time as they haven’t yet appointed sales advisors, but even so, it’s not the best time to be bringing an Airport to the market! I think this is a reflection of Ferrovial and BAA’s own financial position. Bringing LGW to the market now will exclude some potential purchasers who cannot get their hands on money readily under the current climate. Furthermore, for those that can secure finance, it will be at a rate high enough to make them cautious over how much they will pay, especially with LIBOR rates having increased again.

So basically, bringing the Airport to the market now isn’t necessarily going to generate the best price. Furthermore, the operator will not be forced to sell any airports until all the appeals regarding the break up have been heard and considered, so this is not a 100% necessity at the moment. However, given the downgrades in BAA’s own credit rating, and the fact that they have struggled to refinance would suggest to me that this is a safety valve on BAA’s financial position.

My guess is that it will be a serious airport operator that will buy LGW. LCY and LBA both went to investment groups (one of which now has the US Govt. as a shareholder!!!), who’s typical intention for major infrastructure is to leverage as much out of them as possible in terms of finance/debt, and seek quick gains in value through development and growth, and get out within 5 years. But LGW is a cumbersome beast that has no short term growth prospects, and will therefore appeal to a buyer investing over a longer period of time. Essentially the Airport will need a 2nd Runway, which is not likely to occur until at least 2019 due to planning commitments, to release additional capacity and seek grwoth beyond the nominal growth in average load factors and aircraft sizes.

Glasgow next ?