Ferrovial 'set for windfall if BAA forced to sell'
10.08.07
Spanish infrastructure investor Ferrovial could be in line for a large windfall if the Competition Commission forces the breakup of BAA's South-East airports, the Telegraph newspaper reports. The Commission outlined details of its investigation yesterday, but the review is expected to take years to reach its conclusion.
The Telegraph speculates that Ferrovial, which bought BAA last year for £10.3bn, could see Heathrow, Gatwick and Stansted valued in excess of a combined £15.4bn in the event of a forced sale. The reason for this is that, 'the sale of the airports individually could trigger further value creation, because regulators are likely to look more kindly on them once free of BAA's monopoly', the newspaper reports.
When Ferrovial bought BAA, it paid a 20% premium to the regulated asset base (RAB) - the value put on the company's airports. However, one 'industry source' told the newspaper that Heathrow's value alone could rise by £3bn - £4bn against its RAB value of £7.3bn, making it worth as much as £11.3bn - £1bn more than Ferrovial paid for the airports group.
In reality, the Competition Commission decision is unlikely before the end of 2009 and even then, BAA could appeal, making this a long, long, long running story.
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