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Tue 6 Sep 2011 11:29 AM

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Abu Dhabi investment firm eyes Madrid airport bid

Spain is selling contract to run Europe's fourth-busiest hub as it grapples with huge budget deficit

Abu Dhabi investment firm eyes Madrid airport bid
Madrid Barajas airport, which Spain expects to raise at least $5.2bn, drew bids from six groups

Madrid Barajas airport, which Spain expects to raise at
least €3.7bn ($5.2bn), drew bids from six groups led by companies including
local builders Ferrovial, Acciona, FCC and Grupo Empresarial San Jose.

Ferrovial, owner of London’s Heathrow airport, teamed with
Canada Pension Plan Investment Board, Australia’s Industry Funds Management and
Infinity Investments of Abu Dhabi, while Acciona is bidding with Frankfurt
airport operator Fraport AG.

The group led by Fomento de Construcciones & Contratas
SA includes Singapore’s Changi Airport Group, together with Munich- based
Siemens AG, Europe’s biggest engineering company, state-owned Aena Aeropuertos
SA said today in a statement. Grupo San Jose is bidding with Cedicor SA and
Global Mirobriga, Aena said.

Spain is selling a contract to run Europe’s fourth-busiest
hub as it grapples with the euro-region’s biggest budget deficit after Greece
and Ireland. The other bidders, GMR Infrastructure Ltd. of India and a group
including Aeroports de Paris, Global Infrastructure Partners of the US and a
unit of Allianz SE, didn’t identify Spanish members, according to Monday’s

“This isn’t going to be an easy sale,” said Pablo Ortiz de
Juan, an analyst at research firm Interdin Bolsa in Madrid. “The groups are
going to start adding up the numbers and difficult financing conditions and
current economic growth prospects are likely to lead to very prudent

Barcelona’s El Prat airport, valued at €1.6bn by Aena and
also up for sale, drew bids from the same groups with the exception of San
Jose, while also receiving an offer from Abertis Infraestructuras SA, based in
the Catalan city, allied to Borealis Infrastructure of Canada and Ibervias.

Madrid airport last year attracted 49.8 million passengers,
an increase of 2.8 percent, according to industry group Airport Councils
International. The home-base of Iberia, Spain’s biggest airline, added a fourth
terminal and two runways in 2006, giving it the capacity to 70 million people

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Barcelona ranked as the 10th-busiest European airport in
2010, with 29.2 million passengers. A revamped Terminal 1 opened in 2009 and a
further satellite will be added next year, giving a capacity of 55 million

The seven groups lodged their approaches for the airports as
part of a pre-qualification process that ended today. The winning bidders will
take a 90.05 percent stake in each base, according to terms laid out by
Development Minister Jose Blanco.

Contracts will run for 20 years, extendable by a further
five. Interested parties must prove that they have at least €3bn in assets and
experience running an airport that handled 25 million people or more in 2010.
Aena said it will look at the proposals and declare which are compliant next

Ferrovial bought Heathrow-owner BAA Ltd for £10bn ($16bn) in
2006. The UK unit runs a total of six airports in England and Scotland,
together with Cerro Moreno at Antofagasta in Chile.

Madrid-based Acciona is Spain’s main independent airport
ground-handling operator and also provides handling in Frankfurt, Berlin and
Hamburg. Its other businesses include civil engineering and water services, and
it ranks as Spain’s second-largest wind-farm owner.

Partner Fraport confirmed last month that it had made a
joint bid with Deutsche Bank’s RREEF investment unit for German builder
Hochtief AG’s airport assets, which include the main hubs in Athens and Sydney.
Hochtief is itself part of Spanish building group Actividades de Construccion
& Servicios SA.

Barcelona-based Abertis has interests in 29 airports and
runs London Luton and Stockholm Skavsta through its Tbi unit. Abertis was
studying a bid for both concessions while awaiting detail on the pricing regime
and other terms before coming up with a definitive evaluation, it said last

Investment fund GIP has owned London Gatwick since 2009,
while Bangalore-based GMR runs airports in Delhi and Hyderabad.