Freshfields, Linklaters and Slaughters lead on £2bn London City Airport sale

Linklaters has advised a consortium of investors on their £2bn acquisition of London City Airport.

City Airport is the capital’s fastest-growing airport and currently serves 12 airlines and 46 destinations across the UK, Europe and the US.

Linklaters is advising a consortium of investors comprised of Alberta Investment Management Corporation, Borealis Infrastructure, Ontario Teachers’ Pensions Plan Board and Wren House Infrastructure.

The firm advised the consortium on the financing aspects of the final bid, which included a ‘certain funds’ commitment from a club of 13 lenders.

The magic circle firm also advised on the property and planning aspects of the deal, including the existing planning application relating to the airport’s proposed development programme.

Infrastructure partner Ian Andrews and planning partner David Watkins led the Linklaters team. Managing associate Ross Schloeffel assisted the partners during the deal.

Freshfields Bruckhaus Deringer advised the consortium on the M&A, anti-trust and real estate aspects of the deal while Allen & Overy advised the banks.

It is understood that Freshfields’ co-head of our international energy and natural resources group Laurie McFadden and corporate partner Martin Nelson Jones led the team. McFadden has advised Ontario Teachers’ Pension Plan on a number of deals in the past, including a joint venture to acquire a global portfolio of Santander’s renewable energy projects. The portfolio includes onshore wind and solar projects and was valued at over $2bn.

The airport is situated six miles away from London’s financial district and was purchased by US private equity firm Global Infrastructure Partners (GIP) and Highstar Capital in 2006. GIP owns 75 per cent of the airport while Highstar owns the remaining 25 per cent.

Slaughter and May advised GIP throughout the deal. Corporate partner Mark Horton led the team and was assisted by associates Murray Cox and Matt Farrington. Financing partner Philip Snell and tax partner William Watson and their teams also provided advice.

The sale is not subject to any regulatory approvals and is expected to close on 10 March 2016.

Background to the deal

In 2008 Slaughter and May advised GIP on a deal which saw the investor acquire AIG-Financial Products’ 50 per cent stage in London City Airport. The acquisition increased Gip’s ownership of the airport to 100 per cent.

Slaughters partners Mark Horton and Robert Byk advised GIP on the acquisition.

Later that year New York-based Highstar bought its 25 per cent stake in the Airport from GIP. However, rumours have been circulating the market since 2010 that Highstar was looking to divest its interest in the Airport.

In 2013 London City Airport launched its first external legal panel. Legacy Wragge & Co and Eversheds were the two big winners after winning places as the airport’s preferred legal supplier.

Wragges was selected primarily to handle commercial and corporate instructions while Eversheds was picked to advise on employment work. Holman Fenwick Willan and Plexus Law were selected to carry out litigation work.