Stansted Airport's future has taken a sudden turn after BAA's stakeholders (Ferrovial, Qatar Holding, GIC, Alinda and Britannia Airport) have decided to end their long-running appeals against a Competition Commission ruling; BAA announced yesterday that it would end its legal battle to prevent the sale of Stansted.
As soon as it became evident that Stansted may be placed for sale, the names of potentially interested parties have surfaced. Spanish daily Cinco Dias reported that one such party is Manchester Airports Group, which has closely followed the process and may have a commitment from Australian fund IFM on the condition it acquires Stansted.
Another potential bidder is the Korean airport operator Incheon, which already attempted to buy Edinburgh airport as part of a consortium with JP Morgan.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Analysts say that a deal for Stansted may be worth £1.275bn, giving the airport a price-to-EBITDA (earnings before income tax, depreciation, and amortisation) ratio of 14.6.
As such, BAA is open to divesting one of its four London airports ahead of Brazil, Spain, and Portugal's own intentions of selling airport assets.
Analysts at Spanish brokerage firm Ahorro Corporacion said that they expected Stansted had to be sold sooner or later. "We believe that the decision of not appealing the EC ruling, along with Qatar Holding's purchase of a 20% stake of BAA, means that a sale agreement is near," they said.
"We do not expect Stansted to be sold for a significant premium. However, the price should have a positive impact on Ferrovial's stock price because Qatar Holding's purchase may include a preliminary sales price for Stansted and marks a reference for a BAA valuation."
Shares of Ferrovial were up 0.99% to €9.708 on Tuesday morning in Madrid.
SB
