London-listed 3i, whose investments have been buffeted by global turmoil, has joined forces with pension fund manager the Universities Superannuation Scheme (USS) and fund manager M&G to make an offer.
Any deal would be done through the separately listed 3i Infrastructure, City A.M. understands. 3i has a 33 per cent stake in the infrastructure business.
The consortium has reportedly lined up investment bank Macquarie as its advisor but will face tough competition. US private equity house Carlyle was seen as the early favourite and Global Infrastructure Partners, the owner of Gatwick, has also been linked to a bid.
Sir Brian Souter (pictured), the Scottish millionaire who set up rail and bus group Stagecoach, is considering making an offer through his Souter Investments but will wait until he sees paperwork attached to the sale, which could happen next month. A spokesman for Souter declined to comment.
Edinburgh airport could change hands for between £450m and £500m when BAA’s banks Citigroup and BNP Paribas will formally kick off the sale in January.
It comes after the Competition Commission ruled that BAA, which is owned by Spanish infrastructure giant Ferrovial, must sell Stansted and either Glasgow or Edinburgh. The decision was the culmination of a two-year battle between BAA and the watchdog, which said the airport operator exerts a dominant hold on UK airports.
Last year Edinburgh Airport handled about 8.6m passengers, with numbers having gone up 9.5 per cent between the start of 2011 and October.
Edinburgh is seen as a stronger asset than Glasgow because it has a wealthier catchment area and does not compete directly with Prestwick, Royal Bank of Scotland analyst Andrew Lobbenberg believes.
BAA sold Gatwick to a consortium led by Global Infrastructure Partners for £1.5bn in October 2009.
Last month 3i announced a doubling of its dividend and a wave of job cuts in order to pacify investors
Chief executive Michael Queen has come under fire from investors, including Standard Life, Schroders, and Scottish Widows, who have been increasingly frustrated by the firm’s share price performance.
Britain’s oldest private equity house, which declined to comment on Edinburgh, has also been criticised over write-downs of some of its portfolio companies.
In the first half of the year it realised £532m in the first half from sales, such as industrials groups Hyva and Norma, mainly in the first couple of months of the period. It retains stakes in upmarket lingerie brand Agent Provocateur and architects Foster + Partners.
USS and M&G could not be reached.