Qatar Holding buys into British airport operator

DOHA – A Qatari government investment fund Friday said it had reached a deal with Spanish company Ferrovial to buy 20 percent of the company that operates London’s Heathrow, Stansted and other British airports.

Qatar Holding LLC said it had agreed to buy the stake in BAA from Spanish infrastructure group Ferrovial S.A. and two other existing investors in the airport company.

Ferrovial said in a statement it was selling 10.6 percent of FGP Topco Ltd., the holding company that owns BAA, to Qatar Holding for 478 million pounds ($748.9 million).

“The total value of the shares purchased is thus 900 million pounds sterling, or €1.144 billion ($1.4 billion),” Ferrovial said, adding that the sale required approval from the European Competition authorities and was “expected to be completed before the end of the year.” Ferrovial CEO said his group welcomed Qatar Holding’s investment and hoped it would “ensure that Heathrow retains its position as one of the best infrastructure assets in the world.”

Ferrovial and its partners paid about £4.3 billion in equity for BAA in 2006 and has since injected about £500 million more into the group. But it is also taking out £240 million in dividend payments this year - leaving its total equity investment only slightly ahead of the £4.5 billion valuation implied by the Qatari deal.

“Between 2006 and today they’ve created zero value and yet today looks like a great exit simply because they were in negative equity three years ago,” said a City analyst. – Agencies