Edinburgh Airport Sale Lures Koreans; JPMorgan Said to Mull Bid

Edinburgh airport, offered for sale by BAA Ltd., has attracted interest from Korea’s biggest hub, while half a dozen financial firms including JPMorgan (JPM) Chase & Co. may bid, according to people with knowledge of the auction.

Incheon International Airport Corp. is mulling an offer for the Edinburgh terminal, which BAA is selling to meet antitrust requirements, and may form a bid group with Korean institutions, Chief Executive Officer Lee Chae-Wook said in an interview.

JPMorgan’s infrastructure fund is also considering a bid for Scotland’s busiest airport, which analysts reckon may fetch 600 million pounds ($930 million), said a person familiar with the plan who declined to be named because the sale is private. Rival bids may be led by Carlyle Group, Global Infrastructure Partners Ltd. and 3i Infrastructure Plc (3IN), other people said.

“Edinburgh has a relatively wealthy catchment area and that makes it an attractive asset,” said Douglas McNeill, a transport analyst at Charles Stanley in London. “It’s a big tourist centre and the financial industry there has held up pretty well.”

Opened in 1977, Edinburgh has two runways, one terminal and serves more than 100 destinations. The airport, which boosted passenger numbers 8.2 percent to 8.8 million in the first 11 months of 2011, is being sold after BAA, also the owner of London’s Heathrow hub, lost an appeal against a breakup ordered by the U.K. Competition Commission.

Gatwick Stake

“We don’t just want to invest, that’s what financial companies do,” Incheon’s Lee said today in an interview at Asia’s third-busiest airport for international flights. “We are more interested in operating the airport.”

South Korea’s National Pension Service, the country’s biggest investor, bought a 12 percent stake in London Gatwick airport from GIP in February, 2010. GIP bought Gatwick for 1.51 billion pounds from BAA in 2009 at the start of the breakup.

GIP, which also owns London City Airport, is being advised by Royal Bank of Scotland Group Plc (RBS), a person familiar with its strategy said. The fund, founded by Credit Suisse Group AG and General Electric Co., is bidding on its own, the person said.

3i’s proposal is likely to include Prudential Plc (PRU)’s M&G Investment Management Ltd. and the U.K.-based Universities Superannuation Scheme, said a person with knowledge of the plan.

Carlyle will bid in a group that’s being led by Edinburgh- based bank Noble Grossart, a person said. Arcus Infrastructure Fund, which last year acquired Edinburgh-based Forth Ports Plc for 746 million pounds, is also interested in joining a bid group, said a person familiar with the fund’s intentions.

Citigroup Inc. (C) and BNP Paribas (BNP) SA are organizing the sale for BAA. The unit of Spanish builder and infrastructure company Ferrovial SA (FER), which acquired it in 2006 for 10.1 billion pounds, aims to complete the disposal by June.

To contact the reporters on this story: Steve Rothwell in London at srothwell@bloomberg.net; Kyunghee Park in Singapore at kpark3@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net; Neil Denslow at ndenslow@bloomberg.net

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