Canadian pension fund retains 2.7% of Heathrow after selling part of its stake to Ardian and Saudi fund
A consortium of investors, including Spain's Ferrovial SE and Canada's Caisse de dépôt et placement du Québec (Caisse), has reduced its holdings in Heathrow Airport’s parent company, FGP TopCo Ltd., in a deal valued at £3.3bn.
Financial Post reports that French private equity firm Ardian acquired a 22.6 percent stake, while Saudi Arabia’s Public Investment Fund (PIF) purchased a 15 percent share.
Ferrovial initially struck a deal in November 2023 to sell 25 percent of its Heathrow stake to Ardian and PIF.
However, institutional investors, including the Caisse, exercised tag-along rights, leading to a revised June agreement that increased the total sale to nearly 38 percent of TopCo. Investors participated on a pro-rata basis, reducing their stakes accordingly.
Caisse spokesperson Jean-Benoit Houde explained the rationale behind the sale, stating, “The transaction with Heathrow (was) made in connection with rebalancing our infrastructure portfolio, having been a long-term investor with nearly two decades of ownership.”
Despite the sale, the Caisse will retain a 2.7 percent stake.
The Caisse first acquired a significant Heathrow stake in 2006 as part of a consortium that purchased the world’s largest airport operator, BAA PLC, for $24.7bn.
Over the years, the Caisse has gradually sold down its position, which stood at 12 percent, valued at more than $1.5bn, as of December 2022.
Ardian called Heathrow “an iconic global infrastructure asset” in a news release, emphasizing the acquisition as a boost to its portfolio of airport holdings. The firm already holds stakes in six Italian airports and specializes in transport and aviation assets.
Ardian’s infrastructure head, Mathias Burghardt, highlighted the growth potential, stating, “The timing was good. We see growth because we are convinced that we can improve the business.”
Managing director of infrastructure and transport at Ardian, Alexis Ballif, noted Heathrow’s strong recovery from the COVID-19 pandemic, with passenger numbers now exceeding pre-pandemic levels.
He also pointed out the airport’s improved balance sheet following financial challenges during the pandemic.
Ardian is also eyeing future investments in Canada, a priority for its American fund, with an emphasis on transport and digital infrastructure.
Burghardt acknowledged the limited opportunities in Canada due to the prevalence of publicly owned infrastructure, but said the firm remains interested in potential projects.
The Heathrow sale comes as Ottawa considers measures to encourage domestic pension fund investment in infrastructure, including airports.
Deputy Prime Minister Chrystia Freeland has tasked former Bank of Canada governor Stephen Poloz with exploring ways to boost institutional investments in Canada. This mandate, outlined in the spring budget, specifically referenced airports.
Meanwhile, Canada’s Public Sector Pension Investment Board (PSP Investments) recently expanded its airport holdings. Through its AviAlliance platform, PSP acquired AGS Airports, which operates facilities in Aberdeen, Glasgow, and Southampton, in a transaction valued at £1.5bn.
The renegotiated Heathrow deal, which closed Thursday, valued the airport below the price implied by the initial 25 percent purchase agreement of £2.4bn.
This highlights the fluctuating valuations for airports globally following the pandemic’s impact on the travel industry.
Ferrovial and other investors, including the Caisse, will retain minority stakes in TopCo, with Ferrovial holding 5.3 percent and other sellers collectively maintaining 10 percent of issued share capital.
