London City could be the next British airport to fall into foreign hands as the shortlist of around six bidders includes only one UK company.

Construction group Balfour Beatty has teamed up with US bank Merrill Lynch to bid for the Docklands airport, which handled almost 2m passengers last year.

London City airport could fall into foreign hands
The second round of the auction, being handled by Morgan Stanley, closes on Tuesday. Sources believe offers will need to be pitched at £650m-£700m to have any chance of landing the airport.

That is higher than initial valuations of £600m in May when the airport’s owner, Dermot Desmond, put the business up for sale. Mr Desmond, one of Ireland’s richest men, stands to make a fortune from any sale. He bought the airport in 1995 from builder Mowlem for just £23.5m.

Balfour Beatty, whose initial partner 3i dropped out of the auction, faces competition from at least five other potential bidders, though whether they are all capable of delivering an offer is unclear. There has already been considerable chopping and changing among the members of some consortia.

The early frontrunner is a consortium led by Sacyr Vallehermoso, the Spanish construction group, which has teamed up with French insurer Axa and is being advised by HSBC bank.

Posted: 09|7|06 at 8:30 am. Filed under: UK News.