BAA abandons Stansted sale fight
BAA is to give up its long legal battle over the forced sale of Stansted Airport.
The company, which recently lost a Court of Appeal ruling over Stansted, said it would not make a further appeal and would proceed with the sale of the Essex airport.
The Competition Commission had originally ruled that BAA must sell Gatwick, Stansted and one of its Scottish airports following an inquiry into the company’s airport ownership.
“We still believe that the Competition Commission ruling fails to recognise that Stansted and Heathrow serve different markets,” BAA said in a statement.
The BAA decision today ends a process which began as far back as March 2007 when the Office of Fair Trading referred BAA airport services to the commission.
The ruling that BAA must sell off Gatwick, Stansted and one of either Glasgow or Edinburgh Airports was made in March 2009.
Gatwick was sold to Global Infrastructure Partnerships (GIP) in December 2009 and GIP also took over Edinburgh Airport last year.
BAA mounted a series of legal challenges to the commission ruling, with the latest one - against the sale of Stansted - ending in defeat at the High Court in July this year.
After that latest loss, BAA said it would appeal to the Supreme Court but today the Spanish-owned company signalled an end to its fight to hang on to Stansted.
BAA, which formerly ran seven UK airports, will have responsibility for just four - Heathrow, Southampton, Glasgow and Aberdeen - once the Stansted sale is concluded.
Manchester Airports Group (MAG) is an early frontrunner in a bid battle for Stansted which is also expected to draw US banks, pension funds and Asian operators.
Last week, Qatar Holding, the finance arm of the Gulf Arab state's sovereign wealth fund, took a 20 per cent stake in BAA, underscoring ongoing interest in such assets.
Earlier this month Australia's Industry Funds Management (IFM) agreed to buy a 35 percent stake in MAG if the group wins the battle to buy Stansted.
Banking sources said MAG, which also operates Britain's Bournemouth and East Midlands airports, is likely to face competition from the infrastructure arms of US banks, as well as investors in and owners of airports in Asia.
Global Infrastructure Partners (GIP), which bought Scotland's Edinburgh airport for $1.3 billion earlier this year, is unlikely to bid for Stansted because it knows any move would be blocked by regulators. It also bought Gatwick - Britain's second busiest airport behind London Heathrow - for £1.5 billion in 2009 when the regulator forced BAA to dispose of that site.
The ongoing regulatory crackdown has been a major headache for Ferrovial. When it bought BAA for £10.3 billion in a highly-leveraged deal in 2006, Ferrovial planned to keep all of its airports and make them more efficient by outsourcing services. Instead, it has been forced to sell assets at a time when valuations are lower than when it bought the business.
Single runway Stansted, which is predominantly a low-cost leisure and holiday airport, is based 50 km northeast of central London and is the fourth busiest airport in the UK.
Plans for extra runways at Stansted and Heathrow were dropped by BAA after the Conservative-Liberal Democrat coalition came to power in 2010 and the future of the airports is unclear.