SYDNEY - Commonwealth Bank of Australia, the nation's largest asset manager, may contribute more than A$1 billion ($1.2 billion) to join a Goldman Sachs-led group in a bid for BAA, the world's biggest airport owner.
The bank's Colonial First State Global Asset Management unit is a member of a Goldman
group that is "reviewing its options" in relation to a possible higher offer for BAA, Sydney-based CBA said yesterday.
Colonial First State manages A$137 billion and is seeking investments in airports and energy utilities that it bundles into funds and manages for a fee. Macquarie Bank, Australia's second-biggest asset manager, oversees stakes in six airports, including Rome, Brussels and Sydney.
"They are monopoly-type assets and the revenue streams are very stable," said Peter Vann, at Constellation Capital Management in Sydney. "Anything to do with infrastructure is popular and sexy, but there's growing competition for assets."
BAA is fighting bids from Grupo Ferrovial, which sweetened its proposal to 900p ($26.86) on May 30, and Goldman Sachs, which offered 870p a share in April. BAA owns Heathrow, the world's busiest international airport, and other London-area airports Gatwick and Stansted.
Colonial already owns stakes in airports in Brisbane, Perth and Adelaide. Chief executive Warwick Negus, 44, worked at Goldman as an asset manager and banker for nine years. He quit in 2002 to start Australian fund manager 452 Capital before joining Colonial last year.
The UK's Office of Fair Trading said it might investigate BAA's dominance of UK airports.
An investigation may lead to the breakup of the company's seven UK airports, which include Scotland's Edinburgh, Glasgow and Aberdeen.
- BLOOMBERG
