Ferrovial’s Heathrow baggage may elicit few claims

Lines of passenger luggage lie arranged outside Terminal 2 at Heathrow Airport in London, Britain, June 19, 2022. REUTERS/Henry Nicholls/File Photo

LONDON, Aug 10 (Reuters Breakingviews) - Whoever picks up Ferrovial’s (FER.MC) Heathrow baggage will need a thick skin. The Spanish infrastructure operator is considering a sale of its 25% stake in the UK’s biggest airport, according to Reuters. Potential buyers include private equity group Ardian and Saudi Arabia’s Public Investment Fund. With relations with airlines and the regulator at a low ebb, and irate passengers and mountains of suitcases clogging up its arrivals halls, it’s easy to see why the 20 billion euro Madrid-listed firm wants out. That may be reflected in the price.

At 13.4 times this year’s forecast EBITDA, the average trading multiple of listed airport operators Aena (AENA.MC) and Aeroports de Paris (ADP.PA), Heathrow as a business is worth just under 23 billion euros. But after deducting its net debt pile, the equity comes to just 5 billion euros, suggesting Ferrovial might expect 1.2 billion euros from any buyer. Given Heathrow’s never-ending headaches – from a potentially prolonged UK recession to baggage-handling cock-ups, understaffed security gates and expansion plans nixed by increasingly climate-conscious courts – that may be a stretch. (By Ed Cropley)

(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)

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