EMEA: ADP privatisation set to attract infra heavyweights

30 August 2018 - 12:00 am UTC

Vinci and at least three other infrastructure heavyweights are expected to take part in next year’s sale of a majority stake in Groupe ADP, according to sources.

Vinci, which owns 8% of the operator of Paris CDG and Orly airports, is expected to fight hard to win the auction process, which involves the sale under a 70-year concession term of the state’s 51% stake in Groupe ADP. Vinci is seeking to strengthen its airport business globally, and is widely expected not to miss the largest airport sale in its home market in 2019.

Due to the massive price that the state could fetch for this controlling stake, Vinci is expected to need to bid jointly with at least one financial partner, according to sources.

The stake is reportedly worth at least EUR 10bn – equivalent to around 15 times EBITDA. But sources said the state could fetch an EBITDA multiple in the high 20s, given it is the main airport operator in one of Europe’s wealthiest capital cities, its consistently strong financial performance, and the long concession contract. One source said that the multiple may even get close to the circa 40x paid in 2016 for London City Airport.

For full-year 2017, Groupe ADP recorded an EBITDA of EUR 1.57bn, a 31% YoY increase partly driven by the full consolidation if its Turkish subsidiary TAV Airports. Excluding this item, its EBITDA was EUR 1.29bn. It is not known if TAV and other ADP assets other than the two Paris airports will be part of the sale process.

Sources said other likely bidders are an IFM-led consortium, a GIP-led consortium and potentially an Atlantia-CPPIB joint venture.

Market commentators questioned whether the recent Genoa bridge disaster and the ongoing dispute between Atlantia and the Italian government, which has threatened to revoke the concession of its subsidiary Autostrade per l’Italia, will impact on the Italian infrastructure group’s appetite and investment plans.

One source said that ADIA might also seek to join one of the above consortia, while another one said that French funds such as Ardian and Antin might also be interested. Foreign infrastructure funds willing to bid are expected to join forces with a French partner, one source said.

The auction process is due to start in 1Q19, after a new bill allowing the privatisation is passed in the autumn. The sale is likely to be launched after the listed company’s 2018 accounts are closed next February, as previously reported.

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