Two out of the 5 parties interested in bidding for the Gatwick Airport have pulled out of the bidding only 6 weeks before the final bids are due, which poses a problem for Ferrovial, the majority owner of the airport.

On Monday, Babcock and Brown and RREEF, the infrastructure fund of Deutsche Bank, confirmed that they were pulling out of the bidding despite having submitted a non-binding, indicative bid during January.  The group has been hit with financial issues from the parent group of Babcock & Brown in Australia.

The consortium led by 3i is now considered to be out of the bidding as well, with some of the members of the group talking about joining other consortiums to stay in the bidding, because of concerns that the price on the airport would be too high.  They may rejoin the bidding, but they are only prepared to offer between £1.75 billion to £1.8 billion for Gatwick Airport.

The British Airports Authority, the operator of the airport, said that the market will determine the airport’s sale.  There isn’t an asking price, they continued, and they are confident that the interest level will secure a major premium for the regulated asset base.

Gatwick Airport is the second biggest airport in the United Kingdom, as well as the busiest airport in the world that has only one runway.  The regulated asset base of the airport is estimated to be £1.65 billion.   The 3 consortiums still in the bidding include: Global Infrastructure Partners, Lysander Gatwick Investment, and Manchester Airport Group, which is combined with Borealis.

Visit www.gatwickairport.com for more information.