Macquarie Eyes on London City Airport

By Robert Lea, Evening Standard, London

May 15–Wheeler-dealing Australian finance house Macquarie has emerged as a likely front runner to buy London City Airport which has been put up for sale with a price tag of about £400 million.

The sale of fast-growing London City, the airport of choice of Canary Wharf bankers, will net another fortune for Irish tycoon Dermot Desmond, who bought the Docklands airstrip with an uncertain future in 1995 for £23 million.

Morgan Stanley, the US investment bank that handled a £95 million recapitalisation of the business around the turn of the decade, has been instructed to handle the sale after it received what is said to be a number of unsolicited offers.

Among those will be Macquarie, which is known to have looked at buying the company four years ago though it is believed potential acquirors have been put off until they saw the effect on the business of it eventually being linked — as it was at Christmas — to the Docklands Light Railway.

Macquarie has made little secret of its desire to buy European airports, having built up control of or stakes in Birmingham, Bristol, Brussels, Rome and Copenhagen airports.

Its appetite for smaller airports — London City’s short airstrip means it cannot handle aircraft bigger than 100-seaters — was seen last year when the competition authorities blocked its bid for Exeter airport.

Macquarie’s involvement in Ferrovial’s attempt to buy Heathrow, Gatwick, and Stansted group BAA, however, could alert regulators again.

Other bidders for City airport could include another Spanish group Abertis which has seen the boom in the private jet market after taking over Luton airport 18 months ago.

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