London, Sep 13: Six groups of bidders were expected to submit second-round offers in the sale of London's City Airport by midday today, sources close to the matter said, in a competition that could top 700 million pounds (1.31 billion dollar).
Irish billionaire Dermot Desmond hired investment bank Morgan Stanley to handle the sale in May. The deal will be a boon to Desmond, who bought the docklands airport in the East of London in 1995 for 23.5 million pounds.
European airports have been drawing investors attracted by stable, long-term income streams thanks to a boom in air travel and predictions that the number of passengers in the region will double to 2 billion by 2020.
City Airport in particular has become one of the busiest transit points in the UK and is expected to be a hub for the London 2012 Olympic Games.
''They're (the bidders) all attracted because of the growth characteristics of the underlying assets. There's lots of confidence in London aviation and the airport's position in the London system,'' said one of the sources close to a bidding group.
Higher traffic will also boost revenues from landing fees and airport businesses such as leases for shops and restaurants.
The sources said the bidding list includes British construction firm Balfour Beatty Plc which has teamed with US bank Merrill Lynch while ABN AMRO's infrastructure fund is bidding alongside Vancouver airport and Australian fund manager AMP Capital.
Spanish construction group Sacyr Vallehermoso has partnered with French insurer AXA and HSBC bank. American conglomerate General Electric's GE Capital is with Credit Suisse's infrastructure fund and US insurer AIG.
French infrastructure fund Galaxy has partnered with Cologne-Bonn airport. And Fraport, the German group that runs Frankfurt airport, has teamed up with Deutsche Bank's infrastructure group.
It could not be learned if all six had submitted bids.
''It's clearly a very attractive asset and it's at a tipping point, positioned for very, very strong growth,'' another of the sources said.
It is expected that Desmond will whittle down the list to a smaller group with the aim of entering exclusive negotiations with one party and closing a deal by the end of September, the sources said.
Earlier this year Spain's Ferrovial snapped up Britain's BAA Plc in a 10.1 billion pounds bidding war. The price was well above initial expectations following a bidding war with a Goldman Sachs-led consortium.
BAA owns London's Heathrow, Stansted and Gatwick airports.
City airport and Morgan Stanley declined to comment on the bidding process.
Reuters
Irish billionaire Dermot Desmond hired investment bank Morgan Stanley to handle the sale in May. The deal will be a boon to Desmond, who bought the docklands airport in the East of London in 1995 for 23.5 million pounds.
European airports have been drawing investors attracted by stable, long-term income streams thanks to a boom in air travel and predictions that the number of passengers in the region will double to 2 billion by 2020.
City Airport in particular has become one of the busiest transit points in the UK and is expected to be a hub for the London 2012 Olympic Games.
''They're (the bidders) all attracted because of the growth characteristics of the underlying assets. There's lots of confidence in London aviation and the airport's position in the London system,'' said one of the sources close to a bidding group.
Higher traffic will also boost revenues from landing fees and airport businesses such as leases for shops and restaurants.
The sources said the bidding list includes British construction firm Balfour Beatty Plc which has teamed with US bank Merrill Lynch while ABN AMRO's infrastructure fund is bidding alongside Vancouver airport and Australian fund manager AMP Capital.
Spanish construction group Sacyr Vallehermoso has partnered with French insurer AXA and HSBC bank. American conglomerate General Electric's GE Capital is with Credit Suisse's infrastructure fund and US insurer AIG.
French infrastructure fund Galaxy has partnered with Cologne-Bonn airport. And Fraport, the German group that runs Frankfurt airport, has teamed up with Deutsche Bank's infrastructure group.
It could not be learned if all six had submitted bids.
''It's clearly a very attractive asset and it's at a tipping point, positioned for very, very strong growth,'' another of the sources said.
It is expected that Desmond will whittle down the list to a smaller group with the aim of entering exclusive negotiations with one party and closing a deal by the end of September, the sources said.
Earlier this year Spain's Ferrovial snapped up Britain's BAA Plc in a 10.1 billion pounds bidding war. The price was well above initial expectations following a bidding war with a Goldman Sachs-led consortium.
BAA owns London's Heathrow, Stansted and Gatwick airports.
City airport and Morgan Stanley declined to comment on the bidding process.
Reuters
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