The Qatar Investment Authority will take a 20% stake in Heathrow operator BAA in a £900 million deal through subsidiary Qatar Holding that suggests the sovereign wealth fund is confident of a third runway being built.
The deal will see BAA’s controlling shareholder, Spanish group Ferrovial, sell a 10.6% stake and partner shareholders Britannia Airport Partners and GIC of Singapore sell a further 9.4%.
The sale will leave Ferrovial owning 39.4% of BAA although it will remain the biggest shareholder.
In a statement the Qatar Investment Authority described the UK as “an attractive investment destination”, noted the “long-term fundamental strength in the British economy” and said: “This acquisition is a key element in our exposure to the infrastructure sector.”
Construction and infrastructure group Ferrovial led a consortium which bought out BAA for £10.3 billion in 2006 near the height of the stock market. Ferrovial paid about £5.5 billion for a 55% stake.
BAA then included Gatwick and Edinburgh airports as well as Heathrow, Stansted, Glasgow, Aberdeen and Southampton.
Within months Heathrow was at the centre of the liquids bomb scare that forced an overhaul of airport security.
Subsequently, the Competition Commission ordered BAA to sell Gatwick, Stansted and either Edinburgh or Glasgow.
The sales of Gatwick and Edinburgh have gone ahead, but Stansted remains under BAA control following a lengthy series of appeals, although the process appears close to being exhausted.
According to one City analyst, quoted in the Financial Times: “It looks like a great exit because they were in negative equity three years ago.”
Ferrovial reduced its stake to just below 50% through a sale to Alinda Capital Partners last October, allowing it to remove BAA’s debt – which stood at £11 billion in June – from its books.
The Spanish group insisted it has no intention of selling more of BAA. Chief executive Inigo Meiras said: “We are still the largest shareholder and will be two times bigger than the second largest. We are committed to the asset.”
Meiras added: “We have to invest a lot of money and in Qatar Holding we have a strong financial investor.”
The deal is subject to the approval of Europe’s competition authorities.