Australian infrastructure giant plots Heathrow Airport swoop

The former owner of Thames Water is weighing the purchase of a multi-billion pound stake in Heathrow Airport in a move that could trigger a fierce tussle for control of Britain’s pre-eminent travel hub. 

Australian investment house Macquarie is assembling the firepower to buy out several of Heathrow’s existing backers who are scrambling for an exit. 

The potential change of ownership has been triggered by the decision of Spanish construction outfit Ferrovial to offload its shares in Heathrow after 17 years as its largest investor. Under the terms of a complex agreement, Ferrovial’s planned departure provides an opportunity for other shareholders to make their escape too. 

With as much as 60pc of Heathrow’s shares likely to change hands, some of the world’s wealthiest investment houses, including Macquarie, are circling the airport. 

A source involved in the talks said: “Heathrow is a great asset. It must be one of the blue-riband assets in infrastructure and in airports.” 

Ferrovial has agreed to sell its 25pc stake to Saudi Arabia’s sovereign wealth fund and Ardian, one of Europe’s biggest private equity houses, in a £2.4bn deal that values Heathrow at just shy of £10bn. 

Ardian is also understood to be trying to raise the capital to purchase the stakes of three other shareholders that are looking to exit. They are Canadian pension fund CDPQ; Singapore’s sovereign wealth fund GIC; and the UK’s Universities Superannuation Scheme. “Tag-along” rights allow them to find a buyer for their pieces of Heathrow at the same price.

This could see Macquarie leapfrog Ardian and become the linchpin in the discussions. The investment bank is expected to buy the remaining 35pc that is up for grabs, allowing Ardian and Saudi Arabia’s state-backed Public Investment Fund to go ahead with purchasing 25pc. The talks are in danger of collapsing unless all the shareholders are able to sell out.

Alternatively, City sources said Macquarie possessed the firepower to mount a competing bid for the entire 60pc stake that is on the block. It manages nearly half a trillion pounds worth of assets around the world.

Macquarie’s interest may be part of ongoing attempts to move on from its controversial ownership of another strategically important piece of UK infrastructure. Critics lay much of the blame for the current predicament of Thames Water at the door of Macquarie, which owned the company for more than a decade from 2006 to 2017.

Britain’s biggest water supplier is facing the prospect of a government-engineered rescue as it buckles under the weight of nearly £19bn of borrowings, roughly three quarters of which is a hangover from Macquarie’s time in charge.

Heathrow has been dogged by similar concerns about its finances. Since Ferrovial’s initial investment in 2006, the airport’s borrowings have ballooned to nearly £17bn, forcing it to fork out £1.5bn in interest payments alone last year.

A shake-up of Heathrow’s shareholder base comes as the Government attempts to secure new powers to influence the independent allocation of slots at Britain’s airports. The shift was revealed in a recent consultation document from the Department for Transport, which said it was proposing to create new powers allowing the Secretary of State to intervene and overrule them.

It is understood that proposed changes to slot allocation rules have inflamed tensions with airlines. An industry source said the changes would “risk adding extra cost and complexity” to their operations. Chris Bosworth, an aviation consultant, said the changes could mean slots were handed out in response to diplomatic pressure from governments around the world seeking an advantage for their flag carriers in exchange for trade deals or other favours.

Macquarie declined to comment.