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Airport News, "BAA favourite to take over Rome airport"
Sunday, September 19, 1999
BAA favourite to take over Rome airport
David Parsley
The London Sunday Times
BAA, the airports group, is this week expected to be short-listed in its bid
to take control of Rome airport. Its consortium partners include CIR, the
Italian manufacturing group owned by the De Benedetti family, which recently
sold Olivetti.
BAA, which has also linked up with Banco di Roma, is understood to be among
a short list of four groups vying to run one of Europe's busiest airports.
While the BAA consortium is being touted as favourite to win, grabbing its
biggest overseas prize yet, it faces stiff competition from three other
consortiums - Hermes, Gemina and ABN Amro.
The Hermes luxury-brands group has joined Pirelli, the cable and tyre
manufacturer, and Benetton for its bid. Gemina, the financial-holding
company, is bidding with McDonald's, the fast-food chain, Falck, the Italian
energy and metal company, Impregilo, the Italian constructor, and
Italpetroli, the Italian oil group.
The final short-listed bidders also include ABN Amro, the Dutch bank, and
Banca Popolare di Milano, the Italian regional bank, Schiphol, the Dutch
airport group, and Frankfurt, the German airport operator.
The competing consortiums are fighting to win 51.2% of Aeroporti di Roma
(ADR), Fiumicino airport in Rome and Ciampina, the small regional airport.
The stake may cost up to £700m. IRI, the Italian state holding company, is
being advised by Lehman Brothers, the investment bank, on the sale after
which a further 3% will be given to local government organisations.
BAA would not comment on its chances of success. The group is keen to win
because the airports offer excellent retail opportunities and its biggest
expansion opportunity outside Britain.
Fiumicino serves 25m passengers and has 258,000 aircraft movements a year.
Ciampina caters for 800,000 passengers with 25,000 aircraft movements.
The ADR privatisation is part of a big auction of Italian state-owned
groups. IRI is also selling 86.6% of Autostrade, the motorways business.
McDonald's is understood to be keen on bidding with its partners for the
motorways. The burger chain believes the routes will provide it with prime
locations to build new, bigger, restaurants for motorists.
If BAA wins it will be expected to carry out extensive developments at both
airports. Fiumicino has already started on its expansion with a new
international terminal expected to be completed next year.
BAA, privatised in 1987, manages six airports outside Britain, including
Indianapolis and Harrisburg in America, and Melbourne and Launceston in
Australia. It also has a stake in Naples airport, which will provide crucial
knowledge of the Italian market.
BAA International has sought to capitalise on opportunities overseas because
deals at home are thin on the ground. BAA owns London's three main
airports - Heathrow, Gatwick and Stansted - and would experience regulatory
problems if it tried to increase its British holdings.
Last month, BAA became the first airports operator to receive a licence from
the Chinese govnernment and it could run up to six airports in the country
within the next 15 years. The group has a 49% stake in Allied Airport
Management, a joint venture with China Airport Construction Company.
It is bidding for a consultancy contract for the soon-to-beprivatised
Beijing airport. If successful, BAA would advise the government and the
airport's management on privatisation. It would also take a stake of up to
10% when the operation is floated on the Hong Kong stock market.
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