THE dismantling of BAA’s British interests moved forward yesterday when it agreed to sell Edinburgh airport to City airport owner Global Infrastructure Partners (GIP) for a surprise £807m.
GIP, an investment fund founded by Credit Suisse and General Electric, beat a consortium led by JP Morgan Asset Management’s infrastructure fund. The price dwarfs the £500m figure expected in the City and reflects the intense competition for the airport, which also attracted the interest of buyout groups 3i and Carlyle.
GIP is expected to quicken the amount of time passengers spend in check-in, security and baggage handling. Chairman Adebayo Ogunlesi said: “We see significant opportunity to apply our tested and successful operational expertise and our knowledge of the global airports sector to develop and enhance the performance of Edinburgh Airport.”
The airport attracted 9.3m passengers last year and generated earnings before interest, tax, depreciation and amortisation of £48.3m. It was recently snubbed by Ryanair, which reduced its flights there, but yesterday the budget carrier said the deal would free it from the “dead hand” of BAA.
JP Morgan Asset Management had led a consortium including Incheon, South Korea’s airport authority and US teachers’ pension fund TIAA-Cref. However, TIAA-Cref pulled out earlier this month.
BAA, part of Spanish infrastructure company Ferrovial, owns Heathrow, Stansted, Southampton, Glasgow and Aberdeen airports.
It was made to sell one of its Scottish airports by the Competition Commission, and is contesting a ruling that it must offload Stansted.
If Stansted comes on the market then GIP is unlikely to be allowed to bid because of its controlling stakes in Gatwick, which it bought from BAA for £1.5bn in 2009, as well as City airport.