Sale of UK air traffic attracts interest from 3i

Michael Bow
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LISTED private equity firm 3i has entered the fray to snap up a minority stake in the UK’s air traffic control agency amid an ownership shake up at the air controller, it emerged yesterday.

3i, led by chief executive Simon Borrows, is understood to have registered its interest in bidding for a 12 per cent stake in National Air Traffic Services (Nats), which has been put up for sale by Thomas Cook Airlines and Tui Travel.

The FTSE 250-listed firm, which makes investments through its listed 3i Infrastructure fund, is in the midst of a restructure as management seeks to make infrastructure and debt management a larger part of the business.

3i, which has seen its share price rally close to 20 per cent since December, declined to comment yesterday.

If 3i does bid, it is likely to face a flurry of rival offers for the stake, which is valued at around £65m.

Serco, Lockheed Martin and Global Infrastructure Partners, which owns Gatwick, have all been tipped in the past as potential investors.

The Treasury, which owns a 49 per cent stake in Nats on behalf of the Crown, reversed a plan to sell its stake last year citing security concerns.

Another 42 per cent chunk is owned by a seven strong consortium of airlines called The Airline Group – which includes Thomas Cook Airlines and Tui Travel as well as British Airways and Virgin Atlantic.

The last set of accounts filed for The Airline Group show its 42 per cent stake valued at £227m.

The combined Thomas Cook and Tui stake would be worth around £64.8m on that basis.

3i’s infrastructure division was uprated to a “buy” rating by Oriel Securities last week, with RBC Capital also putting a sector performance rating on the stock late last year.