Is BAA Set To Be Broken Up?
News that BAA parent Ferrovial has received a number of approaches for Gatwick Airport and other assets held by the group, ahead of the Competition Commission announcement, has set the rumour mill in full flow. The clever money seems to be on a total revamp of the UK airport sector with BAA likely to be forced to sell off some airports around the UK to encourage competition.
If this move is confirmed it will infuriate Ferrovial which only a few years ago completed the multi billion pound takeover of the group. If the Competition Commission force the group to downsize then there is a chance that they may not be able to realise the full value of the assets involved. This rumoured announcement comes at a time when the group has just announced the completion of a complex £13 billion debt refinancing arrangement which has literally taken over a year to complete.
The refinancing was completed on the understanding that the group's substantial investment over the last few years would allow it to receive the rewards into the future. While any increase in competition in the UK airport sector will ultimately be beneficial for consumers the impact upon BAA's long term future remains unclear.
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