Infrastructure news

Macquarie is studying a possible £3.5-to-£4bn (€2.6-€2.9bn) bid for Southern Water. According to reports the Australian group has been seeking advisers. It is also believed to have formed a consortium to buy Southern Water. The utility is currently mainly owned by the Royal Bank of Scotland, which has appointed Deutsche Bank to advise on the sale of the company. The first bids for the company are due in at the end of August. In July press reports suggest Goldman Sachs is putting together a consortium to buy-out Southern Water for US$8bn. Prudential Infracapital fund, which acted with Goldman Sachs to buy British Associated Ports in 2006, was thought to have been asked to join the consortium. Southern Water is currently owned by a consortium led by the Royal Bank of Scotland, which bought the utility for US$4bn in 2003. It has appointed Deutsche Bank to find a buyer for its holding. Last year, Macquarie led a consortium to buy the UK’s largest water company, Thames Water for £8bn. Since then, Macquarie Bank has transferred its ownership of Kemble, the vehicle that owns Thames Water, from its balance to its own infrastructure funds. They now own around 45% of the holding company, according to newspaper reports. This might be enough for the UK water regulator to OK any deal involving Macquarie buying another UK water company. Generally, speaking the regulator is not keen on multiple water companies being owned by a single company. Although, there is some speculation that it may have relaxed its views over ownership.

• Macquarie is also thought to have approached airport operator, BAA, regarding the acquisition of at least one of south-east England’s airports according to reports. Macquarie and Frankfurt airport owner, Fraport, are among several groups that are thought to be interested in acquiring one of BAA’s airports. BAA was acquired last year by Spain’s Grupo Ferrovial and following an investigation into its dominance by the UK Competition Commission, the operator could be forced to sell Heathrow, Gatwick and/or Stansted airports. Dubai Aerospace is also thought to have joined the list of investors thought to be interested following reports that it would consider making a bid for Gatwick Airport if it was put up for sale. The firm has already made a bid for New Zealand’s Auckland Airport. Earlier this month the Competition Commission published a statement as part of an investigation into the competitiveness of the UK’s airport services market. Commission deputy chairman Christopher Clarke said: “We are looking at how common ownership could affect BAA’s incentives both to invest in and develop its airports, and operate them.” However, BAA responded saying it welcomed the opportunity to state its case to the Commission and was confident it will demonstrate that BAA’s ownership of airports in the South East is in the interests of passengers. The result of the investigation is not expected until December 2008.