GIP wins Edinburgh Airport after tight bidding war

Global Infrastructure Partners has outbid JP Morgan Asset Management for Edinburgh Airport, a prized UK-based asset that went on sale in January. GIP paid £807m, giving the fund its third UK airport and its first deal from Fund II.

A fierce bidding war for Edinburgh Airport concluded today when Global Infrastructure Partners (GIP) finalised an £807 million (€990 million; $1.3 billion) transaction with erstwhile owner BAA.

The deal netted GIP, a London and New York investment fund, full ownership of Edinburgh Airport, located in Turnhouse, a suburb of Edinburgh, Scotland, and ranked the sixth busiest airport in the UK.

“Edinburgh Airport is a high quality infrastructure asset,” said Adebayo “Bayo” Ogunlesi, GIP chairman and managing partner, who went on to describe the acquisition as “a landmark deal” for his company.

Ogunlesi also pointed out Edinburgh is the first investment by Global Infrastructure Partners II, GIP’s second infrastructure fund which held its first close on $3 billion last December. GIP is expecting to raise $6 billion for the fund.

In acquiring Edinburgh, constructed in 1977, GIP outlasted a neck-in-neck contest with JP Morgan Asset Management (JPMAM). JPMAM had partnered with TIAA-CREF to bid on Edinburgh, but the $450 billion pension fund manager dropped out in April. A JP Morgan spokeswoman in London declined comment.

Washington, D.C.-headquartered $150 billion private equity firm The Carlyle Group and 3i Group had also pursued Edinburgh, which went up for sale in January, before dropping out in March.

For Global Infrastructure Partners, Edinburgh will mark its third airport asset. The fund in 2006 bought London City Airport from billionaire financier Dermot Desmond and landed Gatwick Airport in 2009 from BAA, which is owned by Spanish developer Ferrovial.

BAA is currently locked in a court battle to try to retain London’s Stansted Airport, which it has been told to sell by the UK’s Competition Commission. A similar ruling forced BAA to sell Gatwick to GIP.

The Competition Commission gave GIP approval to purchase Edinburgh. RBS Capital Markets acted as financial adviser to GIP, while Slaughter and May provided legal advice. A GIP spokesman in New York declined additional comment.