Report: Hochtief withdraws Gatwick bid

The withdrawal likely leaves five contenders for the UK’s second busiest airport. First-round bids for the airport, one of seven owned by BAA, were submitted last week.

German construction company Hochtief has pulled out of the bidding for London’s Gatwick airport, Reuters reported, citing a person familiar with the process.

The withdrawal likely leaves behind five other bidding parties:

A consortium consisting of Citi Infrastructure Investors, Canada’s Vancouver Airport Services and John Hancock Life Insurance; a consortium of Canadian pension funds Ontario Teachers and Canada Pension Plan, along with 3i Infrastructure; Deutsche Bank's RREEF Infrastructure partnership with Babcock & Brown's European Infrastructure Fund; Global Infrastructure Partners and Manchester Airport Group, bidding with Canada’s Borealis Infrastructure.

Hochtief declined to comment.

BAA received indicative bids for Gatwick last week. It has previously stated that regulated asset base, a formula used to value regulated assets such as utilities according to their revenue streams, values Gatwick between £1.7 and  £1.75 billion (€1.94billion; $1.51 billion) and that it expects to see a significant premium paid above that level.

In December 2008, analysts at Societe Generale Equity Research valued Gatwick Airport at £1.6 billion on a sum-of-the-parts basis, representing an enterprise value to 2007 EBITDA multiple of 10.7x.

The airport is one of three that the UK’s largest airport operator will potentially be forced to sell as part of an ongoing market inquiry by the UK’s Competition Commission into the competitiveness of UK airports.

Aside from Gatwick, the commission has indicated that it may force BAA to sell Stansted Airport and Edinburgh Airports.

Societe Generale estimated that Stansted could be worth £1.3 billion on a sum-of-the-parts basis, representing an enterprise value to 2007 EBITDA multiple of 11.7x.