Hochtief sells airports at discount to PSP Investments

The €1.1bn sale price will generate ‘no significant extraordinary earnings’ for Hochtief’s shareholders.

After several aborted sales processes, German infrastructure developer Hochtief has finally managed to divest its airports unit, albeit for a lower price than originally touted in previous attempts. 

The buyer is Canada’s Public Sector Pension Investment Board (PSP Investments), which spent €1.1 billion buying Hochtief’s holdings in Athens, Budapest, Dusseldorf, Hamburg, Sydney and Tirana airports. The sale price is, however, below the actual value of the six assets, which Hochtief pegged at €1.5 billion, including €400 million in minority interests. 

Hochtief added it “expects no significant extraordinary earnings impact from the transaction,” due to close in the second half of 2013. The six airports handle circa 95 million passengers per year. 

Marc Gabriel, an analyst at Bankhaus Lampe, told Bloomberg that “the [sale] price makes it more like a gift. In the end, there’s not much left for the shareholders, because no extraordinary result was achieved with the sale. OK, they managed to sell it after almost four years, but the price is not sexy.” 

Asked why Hochtief decided to sell its airports unit below the €1.5 billion asking price of previous sales processes, a spokesman answered only that the price was “adequate” and that “markets have changed over the last years”. 

The last time Hochtief tried to sell its airports division, in 2012, it attracted attention from the likes of Vinci and China’s HNA Group, with the latter rumoured to have offered over €1 billion for the business. Hochtief, however, was said to have been looking for as much as €1.6 billion, eventually canning the sale. 

Marcelino Fernandez Verdes, Hochtief’s chief executive, said the airports divestment was “the result of a very competitive tendering process” and added the firm “will use the released funds as planned to reduce debt and to invest in the operating infrastructure business”. 

For Canada’s PSP Investments, a C$64.5 billion (€48.8 billion; $64.2 billion) pension fund with 5.59 percent of its portfolio allocated to infrastructure, the acquisition will help boost its transport portfolio. 

According to data from Infrastructure Investor Research & Analytics, the Canadian pension currently has 29.4 percent of its C$3.61 billion infrastructure portfolio invested in transport. 

For a complete overview of PSP Investments infrastructure activities, please click here