Leeds Bradford International Airport - Thread 2

[Rob]

If they are considered not to be the best bidder, I wonder what the councils based their unanimous decision on? Just money (ie the biggest offer)?

[rich-leeds]

That's basically it - scoring of the bidding teams was weighted 80% in favour of price.

Interesting interview on Look North earlier with someone from Birmingham City Council who said they were considering re-purchasing the stake of Birmingham International Airport that they sold in recognition of the 'wider value' of the asset to the city region. There is a fear that the private operator is too short-termist...

[XEROX1]

^
And guess who was involved in the part privatisation of Birmingham all those years ago, yep you guessed it - Bridgepoint.

[JOliver]

Then why they submitted the highest bid if they are only for the short-term profit? Why long-term inverstors were outbid? (if they were).

[rhinomatt]

what are the chances of a name change when the takeover has happened?
Leeds (I) Airport. LSA.

[SmartCity]

Originally Posted by rhinomatt

what are the chances of a name change when the takeover has happened?
Leeds (I) Airport. LSA.

No chance of a name change. Part of the deal includes a "special share" which includes keeping the present name of Leeds Bradford.

I believe that overall the new company can only be better than the present set-up. The management of the airport has done remarkably well up to date to fend off competition from the likes of the Manchester Airport and Peel Groups.

The airport has achieved significant gains in traffic over the last five years. The problem has always been the funding of the airport to pay for necessary infrastructure improvements to take the airport to a new level. No council would ever commit say £150m - £200m to a project that is effectively a commercial gamble.

As luftnachrichten has pointed out there is potentially a hidden agenda behind the Bridgepoint acquisition but ultimately I think the move will be good for the airport.

It is my opinion that Bridgepoint will take the airport forward. It is more than probable that the company will do the necessary ground work on the airport and then push for a quick sell. Presumably after all the work is done the airport will be in a much better position to sell to an airport operator such as Abertis, BAA or MAG for example. When this happens the question will become "why did the council sell for so little?".

[Rob]

I suppose if they keep the airport for a few years and improve the infrastructure, terminals, car parking etc and thereby raise the passenger numbers perhaps to 4m, then sell on, they should make a nice fat profit.

[Leeds No.1]

Airport could spread its wings after sell-off

Leeds Bradford Airport.

Richard Edwards
The front runner in the race to buy Leeds Bradford Airport wants to operate more routes from its runways.
Bridgepoint, a private equity firm, has been announced as the preferred bidder for the airport with what is understood to be a £140m offer.
Bridgepoint's bid chairman, Sir Graham Hall, said that if the company was successful it would look to add routes to more destinations, as well as increasing the number of flights.
The firm would also work to improve the quality of the airport and its runways, while also increasing the number of passengers it can handle.
And the company plans to improve the airport terminal's shops and restaurants.
Private equity firms are wealthy companies whose bosses scour the market for potentially money-spinning investments.
Some are set up for specific bids, others, like Bridgepoint, have been around for several years.
Bridgepoint was involved in the 1997 privatisation of Birmingham Airport.
The decision to sell was taken by the five councils which have shares in the airport – Leeds, Bradford, Wakefield, Kirklees and Calderdale.
The councils chose Barclays Private Equity and Churchills Airports as the reserve bidder.
One of the firms is expected to be announced as the new owner by the end of this month.
Welcoming preferred bidder status, Sir Graham said: "This is great news. We look forward to concluding the deal very rapidly and to begin planning for significant development at Leeds Bradford International Airport."
The company says it will reveal details of new destinations and the sale's impact on jobs at the airport when and if the deal is sealed.
Leeds City Council, which, along with Bradford, has a 40 per cent share in the airport, has said it is too early to say exactly how its share of the £140m would be invested. But leader Andrew Carter has said the money will be ploughed into long-term projects that will benefit residents across Leeds.
Kirklees Council has said it will use its windfall to invest in roads and its Warm Zone Plus scheme, which funds installation of cavity wall and loft insulation, smoke detectors and carbon monoxide detectors.
After the airport has been sold, it will stay under Leeds council's planning control.
richard.edwards@ypn.co.uk

[XEROX1]

The company says it will reveal details of new destinations and the sale's impact on jobs at the airport when and if the deal is sealed.

I think that statment is intresting, obviuosly like most other bidders they must have been trying hard to secure new routes from existing LBIA carriers or or even new carriers.

[Leeds No.1]

Is there any possibility for the councils to take the airport back from Bridgepoint and resell if they do not do what they promised? If theyre in it for short term investment=rapid growth and expansion?

[rich-leeds]

I suspect there will be a 'first refusal' type of clause on the deal. However, I think it would be *very* unlikely that the Councils would be in a position to buy an airport, unless they issued bonds or something, which in itself is very rare in today's local government climate.

Even then, I suspect it would be challenging to broker a deal where all 5 Councils re-purchased; they only ended up with joint ownership as a result of the abolition of the former West Yorkshire County Council which used to be sole owner. So, technically yes, but in reality very unlikely unless something changes regarding governance etc.

[SmartCity]

Bridgepoint take control of Leeds Bradford

The BBC has just reported the completion of the sale of Leeds Bradford International Airport for £145m

It reported that the new owners Bridgepoint want to more than double the passengers within eight years to 7m and have already earmarked £70m for spending on its infrastructure.

[Electric_City]

From the Airport website:

News Story

Bridgepoint acquires Leeds Bradford International Airport
3 May 2007

£70 million expansion plan announced

Leeds Bradford International Airport (LBIA) has been sold to European private equity firm Bridgepoint in a transaction totalling £145.5 million following a decision by five West Yorkshire councils to sell 100% of the share capital in the airport.

Commenting on the successful acquisition of the airport, Sir Graham Hall, who will now become chairman of LBIA, said: “Work can now begin on taking our airport up a league in every sense. LBIA is a key asset for our region and we want to build on its recent success and consolidate its role as the dominant international airport serving Yorkshire and Humberside.”

Adrian Williams, a director at Bridgepoint added: “We have a clear vision for the future success of LBIA – a future which will deliver benefits for everyone who uses it. Our aim is that the new LBIA will be one of which the staff and the region will be justifiably proud.”

Under the Bridgepoint strategic plan for the airport, a £70 million capital expenditure plan will be implemented to provide additional terminal capacity to accommodate anticipated growing passenger volumes and to meet more immediate infrastructure requirements. Specifically, the plan is built around:

- investment in, and development of, the existing airside and landside infrastructure to enhance capacity
- development of the route network to increase number of destinations, frequency and to double passenger capacity to seven million by the year 2015
- further development of the LBIA’s commercial revenues in areas such as retail and food & drink.

Bridgepoint has invested in the airport sector in the past. In 1997, it became the largest private investor in Birmingham International Airport (BIA) as part of a financing programme to fund the ongoing development of the airport. It sold its stake in December 2001 and during this five year period international connections at BIA grew by 70%, traffic grew by 40% (reversing leakage to neighbouring airports) and capital expenditure reached almost £200 million.

Leeds and Bradford councils each owned 40% of the airport with the remainder split equally between Kirklees, Wakefield and Calderdale. Although the councils will have no financial stake in LBIA, they retain a ‘special share’ to protect the name of the airport and to ensure its continued operation as an international airport.

The airport was formally advertised for sale in November 2006 in a process run by Ernst & Young, with legal advice prepared by DLA Piper. Bridgepoint was named preferred bidder on 4 April 2007.

Debt for the transaction was provided by Royal Bank of Scotland. Advisers to Bridgepoint in the transactions included: Rothschild (corporate finance), Addleshaw Goddard (legal), Ernst & Young Private Equity (transaction support and tax structuring), Airport Strategy & Marketing, Concession Planning International, Drivers Jonas, TPS Consult (commercial due diligence), ERM (environmental), Marsh (insurance).

Notes:
Bridgepoint is a European private equity firm focussing on the acquisition of companies valued up to €1 billion. With some €8 billion of capital raised to date, it typically focuses on acquiring well managed companies in attractive sectors with the potential to grow organically or through acquisition. See www.bridgepoint.eu.

New investments in 2007 include the €774 million acquisition of Wolters Kluwer Education, a Dutch-based European educational publisher focussing on curriculum based education and learning solutions and the €540 million acquisition of Fat Face, the UK’s leading active lifestyle brand. Other companies backed by Bridgepoint in the Yorkshire region include telecare systems producer for the elderly and infirm, Tunstall, and Alcontrol, the analytical services company that was formerly part of Kelda Group plc.

ENDS


Sir Graham Hall Chairman of LBA and Ed Anderson, Managing Director of LBA

For enquiries regarding this story please contact:
James Murray, Bridgepoint Tel: +44 207 432 3555 or +44 7802 259761

[Leeds rules]

So Now guys,

I wonder what will Leeds City Council do with its £58.2 Million?

We all want diffrent things such as a New Concert Hall, New Road upto the airport and better transport system.

[SmartCity]

Originally Posted by Leeds rules

So Now guys,

I wonder what will Leeds City Council do with its £58.2 Million?

We all want diffrent things such as a New Concert Hall, New Road upto the airport and better transport system.

Spend it on a road to the airport?

[Rob]

How much does Gordon Brown get? Perhaps the councils won't get so much after the taxman's had a go at the money.

[LeedsLad]

Originally Posted by SMARTCITY

Spend it on a road to the airport?

Yep that's exactly what I would do, in conjunction with Bradford to create a proper Leeds West/Bradford East outer ring road from M62 to the airport, dualled at least.
Roads bring major investment - just look at the A1/M1 link with Leeds Valley Park, Thorpe Park and the Aire Valley develpments, all as a result of road investment.
Aswell (or instead) I'd build a tram-train link to the airport.

[Val Verde]

Agree with above posters in that transport to the airport is the absolute priority in improving access to the airport which at present is very poor with substandard road links and the only public transport being a stopping bus service. Whilst the amount raised from the sale of LBA is not enough for all improvements surely they should build a link road from the M62 to the airport and to build a railway to link the airport with Leeds and to potentially go through Guiseley to Bradford. On the subject of rail links to the airport in the 19th century wasn't there plans for a line between Guiseley and Horsforth (which would have had close proximity to the existing airport) but this line was only built to Yeadon from Guisely and has since closed. Couldn't they use that old track bed to make a new route to LBA or is there too much development along this route blocking development?

[JOliver]

Originally Posted by Leeds rules

So Now guys,

I wonder what will Leeds City Council do with its £58.2 Million?

We all want diffrent things such as a New Concert Hall, New Road upto the airport and better transport system.

I am not answering, as have very little faith in ability of governing bodies spend public money efficiently.

[SmartCity]

Originally Posted by Val Verde

Agree with above posters in that transport to the airport is the absolute priority in improving access to the airport which at present is very poor with substandard road links and the only public transport being a stopping bus service. Whilst the amount raised from the sale of LBA is not enough for all improvements surely they should build a link road from the M62 to the airport and to build a railway to link the airport with Leeds and to potentially go through Guiseley to Bradford. On the subject of rail links to the airport in the 19th century wasn't there plans for a line between Guiseley and Horsforth (which would have had close proximity to the existing airport) but this line was only built to Yeadon from Guisely and has since closed. Couldn't they use that old track bed to make a new route to LBA or is there too much development along this route blocking development?

The above plan still stands estimated cost £100m