Qatar Holding, a subsidiary of Qatari sovereign wealth fund Qatar Investment Authority, has swooped on UK airports operator BAA, acquiring a 20 percent stake in the company for £900 million (€1.15 billion; $1.41 billion).
The three-tiered transaction saw Qatar Holding acquire a 10.62 percent stake from Spain’s Ferrovial – BAA’s largest shareholder, now with 39.37 percent of the firm – for £478 million. Concomitantly, Canadian pension Caisse de depot et Placement du Quebec and GIC, Singapore’s sovereign wealth fund, respectively sold 5.63 percent and 3.75 percent of BAA to the Qatari investment vehicle.
“The sale of this stake in BAA is part of Ferrovial’s strategy of establishing a market valuation for our assets and improving the structure of our investment portfolio. After this transaction we wish to reaffirm our role as an industrial investor in BAA,” Ferrovial chief executive Íñigo Meirás commented.
Ferrovial has been progressively diminishing its stake in BAA. Last year, the Spanish developer sold 5.88 percent of the firm to US fund manager Alinda Capital Partners for £280 million. The deal was a strategic milestone for Ferrovial, as the firm saw its controlling stake in BAA dwindle to 49.99 percent and its debts shifted off Ferrovial's books.
BAA currently owns London’s Heathrow and Stansted airports, Scotland’s Glasgow and Aberdeen airports and Southampton Airport, in southern England. The airports operator is, however, embroiled in a bitter legal battle to try and keep possession of Stansted Airport, after the UK watchdog ordered BAA to sell it. It is currently eyeing an appeal against the sale to the UK’s Supreme Court.
According to Ferrovial, the five airports handled 47.4 million passengers during the first six months of 2012, generating £1.27 billion in revenues and £604 million in earnings before interest, tax, depreciation and amortisation (EBITDA) – respectively an 8 percent and 10.4 percent increase in like-for-like terms.