Ireland: DAA to fight sale of UK airport stake Brian Carey THE management of the Dublin Airport Authority (DAA) will resist government pressure to sell its valuable 24% stake in Birmingham airport to fund the €1.2 billion construction of new facilities in Dublin. The management will argue that the company would not achieve a full price for the holding if it was forced into a “fire sale” situation.
Macquarie Airports, which owns a similar stake in the British airport, has pre-emption rights over the DAA stake, including the right to match any third party offer. These rights will depress third party interest in the stake and severely limit bid interest. The Australian-based Macquarie has valued its stake in the airport, Britain’s fifth largest, at €200m.
Macquarie Airports made an informal approach to purchase the entire Aer Rianta group in the past and it has been rumoured that the company has already inquired about the availability of the DAA stake. “It is company policy not to comment on market rumours,” a Macquarie spokeswoman said last week. Macquarie has airport interests in Sydney, Rome, Bristol and Birmingham. Since last December, it has acquired interests in Brussels and Copenhagen and is in talks to purchase Exeter airport.
Birmingham Airport Holdings posted earnings before interest, tax, depreciation and amortisation (Ebitda) of €74m in the year to March last, a decline of 4% on the previous year. The airport generated dividends of around €4.5m for the DAA’s predecessor, Aer Rianta, in the year to March 2004.
The future of the DAA’s Birmingham stake, and holdings in Dusseldorf and Hamburg airports, have come into sharp focus following its failure to secure a 50% increase in airport charges to fund its planned development. Last week, Bill Prasifka, the aviation regulator, set the maximum charge at Dublin airport at €6.14 per passenger, well short of the €7.50 per passenger that the DAA had proposed. The DAA has intimated that the shortfall places the funding of Dublin’s second terminal in doubt.
In a statement, the airport authority said that it was “extremely disappointed” and urged an “immediate review” of the regulator’s decision. It is almost certain to appeal the determination.
DAA’s airport assets, together with duty free shopping company Aer Rianta International, were valued at €147m in the last company accounts. A more realistic valuation would be €600m.
Macquarie Airports is a unit of the Australian bank that has been linked with a bid for the London Stock Exchange.
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