HNA Group, the Chinese aviation and shipping conglomerate, and a consortium led byOntario Teachers’ Pension Plan Board and Borealis Infrastructure, are in the lead to buyLondon City Airport from its United States owners, according to sources close to the potentialdeal.
The central London airport, owned by Global Infrastructure Partners, could fetch more than 2billion pounds ($2.8 billion).
The companies have been asked to submit another round of bids on Wednesday, and GIPhas not chosen a winner, two of the sources said, adding Cheung Kong InfrastructureHoldings Ltd is also still interested in bidding.
The airport, located about 10 kilometers from London’s financial district and opened in 1987, was bought by American International Group Inc and GIP in 2006.
At the time, reports said the companies agreed to pay 750 million pounds, though terms werenot disclosed. Two years later, American International sold its stake to GIP and HighstarCapital, which now owns 25 percent.
Any deal would add to the $22.7 billion of airport-related acquisitions already completed overthe past 12 months, according to data compiled by Bloomberg.
Spokesmen for GIP, PSP and Borealis declined to comment. Representatives for OntarioTeachers’ Pension and CKI did not immediately respond to requests for comment, while amedia representative for HNA said she could not immediately comment.
The winning bidder will have to come to terms with ongoing political wranglings that stand inthe way of a planned expansion that would help City Airport serve 6.5 million passengers ayear by 2023. London Mayor Boris Johnson vetoed the 250-million-pound plan to add aircraftstands, an arrivals terminal and taxiway last year.
Flights from City Airport carried 3.6 million passengers in 2014, according to the operation’sannual report, a 7.9 percent increase from the year before.
HNA, which controls China’s fourth-largest carrier, Hainan Airlines Co Ltd, last month boughta stake in Uber China Ltd and completed its acquisition of aircraft lessor Avolon Holdings Ltdfor $7.6 billion including debt.
Last week, its shipping affiliate announced a $6.1 billion takeover offer for California-basedsoftware distributor Ingram Micro Inc.