EMEA: 3i shortlists bidders for Scandlines majority stake

16 February 2018 - 12:00 am UTC

3i Group has shortlisted bidders to submit final bids in late March for its Danish-German ferry asset Scandlines, sources said.

They are now bidding for a 65% stake in the business, instead of the whole company, one source said.

The bidders include a consortium of Deutsche Asset Management and USS, advised by DC Advisory; a consortium led by First State Investments, advised by Deutsche Bank and Macquarie Capital; and JP Morgan Asset Management, advised by Evercore.

Bidders continue to study plans for the competing Fehmarnbelt Fixed Link tunnel, which is being due to be built by the Danish government.

Once opened, the tunnel, which sources expect to be opened some time between 2028 and 2036, will mean there will be no further need for the Scandlines ferries. The value of Scandlines will depend on when the buyer predicts the tunnel will be completed.

The tunnel will be used by almost all traffic currently on Scandlines’ two routes between Puttgarden in Germany and Rødby in Denmark; and between Rostock in Germany and Gedser in Denmark, due to shorter journey times.

Scandlines is expected to generate steady profits until the tunnel opens, at which point the vessels and real estate could be sold off.

The proposed tunnel linking Fehmarn in Germany and Lolland in Denmark, was originally due to open in 2018. Work has not yet begun as the developer is still seeking planning permission in Germany. Construction will take around 8.5 years.

The earliest estimates put the completion in 2028, but the long planning process could push this beyond 2032, sources said.

3i Group is advised by Rothschild.

First State did not respond to a request for comments. 3i, Deutsche Asset Management, JP Morgan and USS declined to comment.