German construction giant mulls bid for Luton airport operator TBI

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The Independent Online

The operator of Luton airport, TBI, was facing a fresh fight for its independence yesterday after the German construction giant Hochtief said it was considering a cash bid.

Shares in TBI, which also operates airports in Cardiff, Bristol and Belfast, rose 15 per cent to 71p, valuing the company at £397m. There was speculation that the French construction company Vinci could also enter the fray. Vinci launched a hostile bid for TBI two years ago but withdrew its 90p-a-share offer after the 11 September attacks and the subsequent downturn in air travel.

Traders said Hochtief might have to pay about £450m, or 80p a share, although some fund managers speculated that the price could go above 90p if a bidding war broke out between Hochtief and Vinci.

Vinci still has a 14 per cent stake in TBI, built up at the time of its aborted bid in 2001, which could be used as the springboard for a fresh offer. Dermot Desmond, the Irish entrepreneur who owns London City airport, has a 5 per cent stake in TBI while the group's founder Stanley Thomas owns 9 per cent.

Following widespread rumours on the London stock market on Wednesday about an impending bid, the Essen-based Hochtief Airport issued a statement yesterday morning saying it was "considering the merits of a potential acquisition of TBI".

The statement added: "HTA's review, which is at a preliminary stage, may or may not lead to a offer for TBI." It also confirmed that it had "as yet made no approach to TBI".

On Wednesday, TBI's chief executive Keith Brooks described market speculation that it had received a bid approach as "absolute rubbish".

Founded in 1875 by a pair of farm workers, Hochtief is best known as Germany's biggest construction company, but it also has stakes in airports in Germany, Australia and Greece and is leading the consortium building Berlin's new international airport. The company has a stock market value of €1.6bn (£1.1bn) and has turnover of €12bn a year.

Hochtief is 60 per cent owned by the German utilities group RWE which already owns the UK power company Innogy and Thames Water. However, RWE is planning to sell down its stake in Hochtief to concentrate solely on its utility businesses.

Earlier this month, TBI announced a halving of interim pre-tax profits from £15m to £7.2m after £9m of write-downs, mainly relating to its US airport services division, and increased pension, rental and air traffic control charges. Underlying pre-tax profits slipped 9 per cent to £20m.

About half the group's passenger numbers come from Luton.