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French private equity house Ardian and Saudi Arabia’s Public Investment Fund (PIF) have submitted a revised offer to acquire almost 38% of London Heathrow Airport (LHR), which will see current majority owner Ferrovial retain a shareholding in the UK’s largest international gateway.
Spanish infrastructure specialist Ferrovial agreed last November to sell its entire 25% stake in FGP Topco, Heathrow’s parent company, to Ardian and PIF for £2.4 billion ($3 billion), valuing the airport at about £9.5 billion. The stake was to be divided, with Ardian acquiring 15% and PIF 10%.
However, in January it emerged that in accordance with a “tag-along process,” other FGP Topco shareholders representing 35% of the company were also exercising their rights to sell shares. This meant that a 60% threshold must be met to complete the sale.
Since then, Australian investment group Macquarie was linked to a deal for the remaining 35% stake but reportedly ruled itself out in April.
The revised offer represents 37.62% of FGP Topco and will see Ardian acquire 22.6% and PIF take a 15% stake for a total price of £3.26 billion. In turn, Ferrovial will retain a 5.25% shareholding and the “tagging shareholders” that are selling at the same time will keep 4.75%.
“Ardian is pleased to have worked closely with the parties to find this revised agreement and reiterates its strong commitment to investing [in] the UK,” a short statement released by the firm said.
In November 2023, Ardian said the acquisition fits with its approach of “investing in significant infrastructure in its core markets.” The firm was previously a 49% shareholder of London Luton Airport from 2013 until 2018.
Saudi Arabia’s PIF added that its planned investment was “in line with its strategy to support the business as a long-term partner.” The sovereign wealth fund is one of the largest in the world and is controlled by Saudi Crown Prince Mohammed bin Salman.
On June 11, LHR announced it handled 81.5 million passengers in the 12 months to May, setting a new record for the airport. In May 2024 alone, the airport saw 7.2 million passengers, the first time May traffic has ever surpassed 7 million.
The airport also reported strong financial figures for the 2023 calendar year, recording a year-on-year 26.6% spike in revenues to £3.69 billion and a profit before tax of £695 million, up from £173 million during 2022.
Ferrovial has owned a stake in LHR since 2006. Other shareholders include Qatar Investment Authority, Caisse de dépôt et placement du Québec (CDPQ), Singapore-based GIC, Australian Retirement Trust, China Investment Corporation and Universities Superannuation Scheme.
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