Morrison & Co-led group gives up on Stansted Airport race over funding risks, report
Jan. 10 (BusinessDesk) - An investment consortium led by Wellington-based investment bank Morrison & Co has pulled out of the race to buy Stansted Airport in the UK after failing to get bank funding for the deal, according to a British media report.
The group's bankers balked at the funding risks, which required bidders having to stump up with 50 percent of the deal in equity and the remainder in expensive investment grade debt, the Daily Telegraph reported, citing unnamed sources. The airport is Britain's third biggest, and derives about 70 percent of its revenue from budget carrier Ryanair.
Bidders have until Jan. 16 to make an offer, with 1 billion pounds the estimated price tag. Stansted is valued at 1.3 billion pounds based on regulatory calculations.
The consortium included NZX-listed infrastructure investor Infratil, the New Zealand Superannuation Fund and the newly joined Retail Employees Superannuation Trust from Australia, the paper said.
Their exit leaves Manchester Airports Group and Macquarie in the running to buy the airport.
Madrid-based transportation infrastructure investor Ferrovial bought BAA in 2006 for some 10.3 billion pounds, and has been forced to three of its nine airports by the UK's Competition Commission in 2009.
It has already sold Gatwick and Edinburgh airports, and is selling Stansted after giving up its battle when UK Court of Appeal turned down its application in July this year. That leaves it with Heathrow, Southampton airport in southern England and Glasgow and Aberdeen airports in Scotland.