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Global Infrastructure Partners (GIP) is to buy Edinburgh airport from BAA for £850 million, according to the Daily Telegraph. The company, which already owns London Gatwick and City airports, is understood to be in advanced discussions after beating a joint bid from JP Morgan and Incheon International Airport Corporation in the second round of the auction.
Analysts had anticipated a sale price of around £500 million based on the multiple of earnings paid for London Gatwick airport three years ago. US investor Carlyle Group and a consortium led by 3i dropped out of the bidding at an earlier stage.
GIP has made aggressive moves in the UK airport in recent years and earned plaudits for its impact at Gatwick in particular, having worked with airlines to reduce check-in times and improve security processing. And at London City airport, which it bought in 2006, it has added runway capacity and improved punctuality. At both airports it has made significant changes to the commercial offer.
Edinburgh airport welcomed 9.4 million passengers in 2011, up by +9.2% on the previous year. BAA anticipates passenger numbers will reach 12.3 million by 2020. BAA is being forced to sell the airport by the UK Competition Commission, and is contesting a subsequent demand that it also sell London Stansted airport.
