Freshfields and Slaughter and May advise on £1.5bn Stansted Airport sale

Freshfields Bruckhaus Deringer and Slaughter and May have advised on the £1.5bn sale of Stansted Airport.

Stansted has been sold for £1.5bn

Britain’s fourth largest airport was sold late on Friday night after Ferrovial-controlled BAA was forced to sell off assets by the Competition Appeal Tribunal (CAT) (2 February 2012).

The Freshfields team, led by City corporate partners Laurie McFadden and Frank Miller, acted for BAA, which is now known as Heathrow Airport Holdings.

The Slaughters team acting for successful bidder Manchester Airport Group (MAG) was led by corporate head Frances Murphy and partner Jeff Twentyman.

The MAG offer was backed by Australian funders IFM, which was advised by Linklaters corporate and M&A partner Paul McNicholl.

A Burges Salmon team, led by partners Nick Graves, Andrew Dunlop and Matthew O’Regan with associates Julie Book and Amy Watson, advised the Competition Commission on the corporate aspects of the deal.

A team from Herbert Smith Freehills led by partners Julian Pollock and Matthew White advised seller Heathrow Airport Holdings on the real estate and planning aspects of the deal.

Allen & Overy infrastructure partner Conrad Andersen acted for the banks providing financing for the MAG bid.

In November, Freshfields partners McFadden and Miller acted for Ferrovial in its sale of a 5.7 per cent stake in Heathrow Airport to China Investment Corporation (CIC), which was advised by Clifford Chance corporate partner Brendan Moylan, with Simmons & Simmons partner Matt Rees and Fasken Martineau partner Daniel Picotte also picking up roles (1 November 2012).

Ferrovial has been decreasing its interest in the airport with a string of sell-offs of its diminishing stake, including a 10 per cent stake to Qatar Holding in August this year, with Linklaters partner Richard Good advising the Middle Eastern sovereign wealth fund.

BAA decided to end £3m of litigation over the sale of Stansted Airport last year after several rulings by the Competition Commission, the CAT and the Court of Appeal. It opted not to take the case to the Supreme Court.

Herbert Smith partners Nusrat Zar and Stephen Wisking had instructed Brick Court Chambers’ Nicholas Green QC to lead Martin Chamberlain of the same set for BAA throughout. They were assisted by the competition team from Freshfields earlier in the dispute.

BAA’s legal team went head-to-head with Monckton Chambers’ Daniel Beard QC and Alan Bates, instructed for the Competition Commission, and Paul Harris QC of the same set and Sarah Love of Brick Court Chambers instructed by Nabarro partner George Maling for intervener Ryanair.

The series of legal battles against the regulators began after the Competition Commission ordered BAA to sell Gatwick, Stansted and either Edinburgh or Glasgow airports in March 2009, citing market dominance in the sector.

Laurie McFadden
Laurie McFadden

The operator sold Gatwick, its second-largest airport, for £1.5bn in 2009 (21 October 2009).

BAA now owns four UK airports, Heathrow, Southampton, Aberdeen and Glasgow.

The sale is expected to be completed by the end of February.

Passenger numbers at Stansted, have dropped from 24 million in 2007 to around 18 million now. It handles around 131,000 flights a year with 14 airlines serving more than 150 destinations in 32 countries.

MAG owns and operates Manchester, East Midlands and Bournemouth airports.

Background to this deal:

Freshfields has a longstanding relationship with Heathrow Airport Holdings, having advised the Ferrovial-led consortium on the acquisition of Heathrow Airport Holdings (formerly BAA) in 2006, with partner Laurie McFadden advising (6 June 2006), and then on a subsequent refinancing. The team acts for both Ferrovial and BAA and advised on the sale of Gatwick Airport for £1.51bn.

Burges Salmon previously advised the Competition Commission on the sale of Gatwick Airport for £1.5bn in 2009 and Edinburgh Airport for £807m in 2012.

The sale of Stansted marks the completion of the three airport disposals that the Competition Commission ordered in its 2009 report into BAA’s ownership of seven UK airports.

Burges Salmon did not provide competition law advice, which was handled in-house by the Competition Commission.