BAA hires HSBC, RBS on Gatwick airport sale

Oct 24, 2008
LONDON, Oct 8 (Reuters) - British airports operator BAA on Wednesday said it hired HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz)(0005.HK: Quote, Profile, Research, Stock Buzz) and RBS (RBS.L: Quote, Profile, Research, Stock Buzz) as advisers for the sale of Gatwick Airport.

BAA decided to sell the London airport after Britain's Competition Commission said in a provisional ruling in August that the unit of Spain's Ferrovial (FER.MC: Quote, Profile, Research, Stock Buzz) must sell three of its seven UK airports.

BAA has said it disagreed with the Competition Commission, and would try to keep six UK airports after the sale of Gatwick.

Ferrovial bought the BAA for 10 billion pounds two years ago, valuing the seven airports at a 30 percent premium to their combined regulated asset base.

That means it would need to attract a bid of more than 2 billion pounds to make a profit on Gatwick, the second-biggest airport in the UK, serving 35 million passengers a year.

A string of potential bidders, including airline Virgin Atlantic [VA.UL], German builder Hochtief (HOTG.DE: Quote, Profile, Research, Stock Buzz), Frankfurt airport operator Fraport (FRAG.DE: Quote, Profile, Research, Stock Buzz), Deutsche Bank's (DBKGn.DE: Quote, Profile, Research, Stock Buzz) infrastructure arm RREEF and Manchester Airports Group, have expressed their interests.

But the global financial crisis could deter the bidding as costs of capital rise sharply.

BAA has said the sale might not be completed before the Competition Commission publishes its final report early 2009.

The complicated nature of the deal means it could take six months to prepare for the sale people, familiar with the matter said. (Reporting by Daisy Ku; Editing by Paul Bolding)

Source: Reuters