HNA Group, a Chinese aviation and shipping conglomerate, is interested to buy London City Airport from its United States owners for more than 2 billion pounds ($2.8 billion). (Photo : REUTERS)
HNA Group, a Chinese aviation and shipping conglomerate, and a consortium led by Ontario Teachers' Pension Plan Board and Borealis Infrastructure, led bidders interested to buy London City Airport from its United States owners, sources privy to the deal said.
Bloomberg reported that the deal to acquire central London airport, owned by Global Infrastructure Partners (GIP), would cost more than 2 billion pounds ($2.8 billion).
The report said that the bidding companies have been asked to submit another round of bids on Wednesday, Feb. 24, and GIP has not chosen a winner, the sources said, adding that Cheung Kong Infrastructure Holdings Ltd. is also still interested in bidding.
Located about 10 kilometers from London's financial district, the airport opened in 1987 and was bought by American International Group Inc. and GIP in 2006.
During that time, the companies reportedly agreed to pay 750 million pounds, with undisclosed terms. After two years, American International sold its stake to GIP and Highstar Capital, which now owns 25 percent.
According to data compiled by Bloomberg, any deal that will be made now would add to the $22.7 billion of airport-related acquisitions that have been completed over the past 12 months.
GIP, PSP and Borealis, as well as representatives for Ontario Teachers' Pension and CKI, declined to comment, while HNA's media representative said she the same.
The report said that the winning bidder will have to adapt to ongoing political disputes that stand in the way of a planned expansion, as last year, London Mayor Boris Johnson vetoed the 250-million-pound plan to add aircraft stands, an arrivals terminal and a taxiway.
According to the airport operation's annual report, flights from London City Airport carried 3.6 million passengers in 2014, a 7.9-percent increase from the year before.
Last month, HNA bought a stake in Uber China Ltd. and completed its acquisition of aircraft lessor Avolon Holdings Ltd. for $7.6 billion including debt. HNA also controls China's fourth-largest carrier, Hainan Airlines Co. Ltd.
Last week, HNA's shipping affiliate announced a $6.1 billion takeover offer for California-based software distributor Ingram Micro Inc.
