OTPP in double UK airport minority stake sale

31 October 2017 - 12:00 am UTC

Ontario Teachers’ Pension Plan has agreed to sell minority stakes in Bristol Airport and Birmingham Airport to two Australian superannuation funds, it announced on Tuesday (31 October).

New South Wales Treasury Corporation, which invests on behalf of New South Wales, and Sunsuper Superannuation Fund will each buy 15% in Bristol Airport and 7.2% in Birmingham Airport from Ontario Teachers’ Pension Plan.

Ontario Teachers’ Pension Plan, which has sold 30% of its original holdings in both airports, will retain operational management rights. The two acquirors will buy stakes at a new holding company vehicle that controls both airports.

The Canadian pension fund decided to sell the stakes in order to reduce its concentration in airports, its senior managing director, Infrastructure and Natural Resources, Andrew Claerhout, told Inframation, adding that Ontario Teachers’ Pension Plan’s largest sectorial focus is in airports. It also owns stakes in London City Airport, Copenhagen Airport and Brussels Airport.

Claerhout added that he wants to do more similar deals in which OTPP sells minority stakes to passive investors while retaining governance rights.

“Partnership is an important value and as we become more mature then the need and desire for more partnership across the portfolio is becoming more prominent,” he said.

Ontario Teachers’ Pension Plan, advised by Hillbrook Partners and Citi, rejected bids for more than 30% of its original holdings, he added.

Ontario Teachers’ Pension Plan is now left with 33.8% in Birmingham Airport, with the remaining stake held by seven local authorities, and 70% in Bristol Airport.

It acquired with Victorian Funds Management Corp a 48.25% stake in Birmingham Airport in 2007 from Macquarie Airports and Aer Rianta, a subsidiary of the Dublin Airport Authority, for GBP 420m, subsequently acquiring the Victorian fund’s stake.

It initially acquired a 14.5% stake in Bristol Airport from Macquarie in 2002, later adding a 35.5% held by Macquarie Airports for GBP 128m. It acquired the final 50% from Macquarie’s European Infrastructure Fund in 2014.

Bristol Airport is the UK’s ninth largest airport with 7.5 million passengers in 2016. Birmingham Airport is the seventh largest airport in the UK with 11.6 million passengers in 2016. 

The sale is expected to close in late November.