Well, that may be overstating it a bit, but a £6 billion deal for sale of the airport has apparently come unglued in a complex series of issues among the current and would-be future owners, so if you’re sitting on a pile of cash, they’d probably like to hear from you.
Most people are accustomed to thinking of airports as sort of a public utility if not a government function, and that used to be the case, but these days many are either privatized or count on private investors to build and operate terminals and other facilities.
So… what happened at Heathrow? An Australian investment company (country #1) has decided not to invest, because the price has gotten too high. How did that happen? The Public Investment Fund (PIF) of Saudi Arabia (country #2) teamed up with another investor to buy 25% of Heathrow’s shares from Ferrovial, a Spanish (country #3) infrastructure firm for £2.4 billion, which put the value of the airport at £9.6 billion.
That price tempted a number of other shareholders to offer their shares at that price—and under so-called “tag-along” rights, they are entitled to be included. Macquarie had originally intended to buy 35% of the stock, but were now faced with a different situation and have pulled out altogether.
Who were those other shareholders? CDPQ, the investment arm of Quebec’s public pension system (country #4), the Sovereign Wealth Fund of Singapore (country #5) and the wonderfully-named UK Universities Superannuation Scheme (country #6).
There are reports that some of the investors are seeking new customers to buy into Heathrow, thereby cashing out their investments at a good price, but none has come forward so far, although there were reports that Abu Dhabi’s (country #7) investment fund was interested earlier this year.
One word of warning if you are interested: while the current investors managed to pay themselves £4 billion in dividends before the pandemic, and run up £20 billion in debt since then.
