Ontario Teachers’ Pension Plan, Borealis said to win bidding war for London City Airport with US$2.8 billion offer

A consortium led by Ontario Teachers’ Pension Plan Board and Borealis Infrastructure won antique dealer war to purchase London City Airport for about 2 billion pounds (US$2.8 billion), based on people acquainted with the problem.

The group beat an adversary bid from China’s HNA Group to get the facility from Global Infrastructure Partners, the person said, asking not to be recognized as the deal isn’t public. Cheung Kong Infrastructure Holdings Ltd. had also been thinking about bidding, people acquainted with the problem said Wednesday.

Representatives for GIP and Teachers’ declined to comment, while a representative for Borealis didn’t react to a request comment. An official for HNA Group couldn’t be reached for comment beyond regular business hours.

Related

Ottawa talking to pension funds about purchasing infrastructureCanadian pension funds withdraw on infrastructure deals as prices climb beyond reason

The winning bid was reported earlier by the Financial Times.

The airport, located about 6 miles (10 kilometres) from London’s financial district and opened later, was acquired by American International Group Inc. and GIP in 2006. At the time, news reports said the businesses agreed to pay 750 million pounds ($1.04 billion), though terms weren’t disclosed. Two years later, American International sold its stake to GIP and Highstar Capital, which now owns 25 %.

The Canadian-led group will have to be prepared for a political conflict that stands in the way of a planned expansion that will help City serve 6.5 million passengers annually by 2023. London Mayor Boris Johnson vetoed a 250 million-pound plan to add aircraft stands, an arrivals terminal and taxiway last year.

London City Airport handled a record 4.32 million passengers in 2015, 18 percent at least a year earlier, despite the size of aircraft limited by its short runway and noise- curtailment rules requiring steep takeoffs and landings. London Heathrow, Europe’s busiest airport, moved 75 million travelers.
Bloomberg.com