Ardian sells 49% Luton Airport stake to AMP Capital

The French fund manager has exited its concession at the London hub in a deal believed to value the site at close to £1bn.

French fund manager Ardian has sold its 49 percent stake in London Luton Airport to AMP Capital, just over four-and-a-half years after its initial investment.

The Australian group has joined the Spanish airport operator Aena as owner of Luton’s concession, which runs until March 2031. Both parties declined to disclose the details of the transaction, although it is understood the deal represents a 17 times multiple on the group’s 2017 EBITDA, valuing the airport at £997.9 million ($1.4 billion; €1.1 billion). Ardian – investing through AXA Infrastructure Fund III – and Aena, paid £394.4 million for the concession in August 2013.

“London Luton is clearly very attractive as one of the five London airports,” Damian Stanley, head of AMP Capital’s global airports group, told Infrastructure Investor. “It’s pretty difficult to get exposure to the London airports system. The opportunities don’t present themselves all that often.”

Luton’s €58.7 million EBITDA for 2017 was a 10.3 percent fall on the previous year, primarily due to the devaluation of sterling and a one-off expense regarding the employees’ pension fund, according to accounts from Aena. Ardian and Aena also completed a £390 million refinancing last year, replacing several swaps with new swaps and covering the expansion plan of the airport.

The expansion plan includes boosting passenger numbers to 18 million later this year, following an 8.6 percent rise last year to 15.8 million. Preliminary plans unveiled towards the end of last year indicated a wider target for the UK’s fifth largest airport of 36 million to 38 million passengers by the late 2030s or early 2040s.

“It’s going through a very transformational expansion programme,” Stanley added. “It actually sits in a phenomenal catchment, one bigger than Heathrow. There’s a real ability to capture future traffic growth through investment.”

The airport is the sixth in AMP’s portfolio, split between three in the UK and three in Australia. The company most recently bought Leeds Bradford Airport in October.

“I suspect it’s less likely than likely that we’d go after any more in the UK,” said Stanley. “Based on what’s happened over the last few years, where profile airports have been trading from a returns and multiples perspective, it’s not going to be attractive for us. We are selective. What we’ve done with Leeds Bradford and what we will do with London Luton is find returns which are at a premium to where a lot of the profile situations are at, in the UK or elsewhere around the world.”

Ardian’s exit is its second divestment from the AXA Infrastructure Fund III in recent days after it sold Kallista Energy Investments to Canadian renewables company Boralex for €223 million. It is also understood to be preparing the sale of Luxembourg-based utility Encevo.