Heathrow Shortlists Four Bidders For Stansted Airport - Sources

By Marietta Cauchi

LONDON--U.K. airports operator Heathrow Airport Holdings Ltd., formerly BAA, has short-listed four bidders for Stansted airport, people familiar with the situation said Wednesday.

The shortlist includes Manchester Airports Group, which is owned by 10 local authorities and already operates Manchester, East Midlands and Bournemouth airports. It is bidding jointly with Australia investment firm Industry Funds Management.

New Zealand investment management company H.R.L Morrison & Co. Ltd. has also made the cut and is bidding jointly with two funds it manages--publicly-listed fund Infratil Ltd. (IFT.NZ) and the New Zealand Superannuation Fund.

U.S. buyout giant TPG and Australian company Macquarie Group Ltd. (MQBKY) are the other two bidders still in the competition.

Heathrow, which is part owned by Spain's Ferrovial SA (FER.MC), is selling the airport to satisfy competition concerns after a four-year battle with regulators. It has already sold Gatwick, London's second-busiest airport, and Edinburgh airport to comply with the U.K. Competition Commission's concerns over its dominance of the U.K. airport sector.

Deutsche Bank AG (DB) and ING Bank NV are running the auction for Stansted, which has been valued at 1 billion pounds ($1.58 billion). Detailed sales information will be sent out imminently and the bidders given access to due diligence. It is unclear when the next bids are due, but the sale is expected to completed in the first half of 2013.

Ryanair Holdings PLC (RYAAY), Stansted's biggest customer with around 16% of all passengers, didn't submit a bid but has held talks with potential buyers about the airport's future. Ryanair's chief executive Michael O'Leary has consistently criticized BAA's management of the airport, blaming it for the dramatic drop in passenger traffic from a high of 24 million passengers in 2007.

Figures out Monday showed a 4.6% drop in traffic for the nine months to Sept. 30. That translates to 13.5 million passengers compared with 14.1 million for the same period last year.

Any new owner will have to balance investment to improve the airport experience with the need to keep operating costs manageable for carriers.

Write to Marietta Cauchi at [e-mail]

(Gillian Tan in Sydney and Jessica Hodgson in London contributed to this article.)

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