BWI available for sale or IPO, governor says

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Maryland Governor Martin O’Malley said the state is still open to acquisition offers for Baltimore Washington Thurgood Marshall International Airport (BWI). The state also would consider the possibility of an IPO, he said, speaking to Mergermarket at an National Institute of Standards and Technology cybersecurity summit.

”We received offers in the past, before the credit freeze,” he said, ”but they all had undervalued the airport.” O’Malley declined to offer a valuation figure for the state’s stake in BWI. ”We’ll welcome any offers that fully value this airport.”

Chicago’s Midway Airport was sold in October 2008 for USD 2.5bn to a consortium consisting of Citi Infrastructure Investors, YVR Airport Services, and John Hancock Life Insurance. Defeated bidders included Hochtief AG, Aeroports de Paris, Macquarie Group, Babcock & Brown, Gecas, and Albertis, according to media reports at the time of the deal. In April 2009, the deal was terminated when the investors could not raise the capital.

Maryland could also be interested in taking its stake in the airport public, with the aim of it being sold to a private company, said O’Malley. This strategy has been used with success in Poland, as it allows for a more accurate public valuation of the stake.

An industry source speculated that Macquarie, Hochtief AG, Albertis, or the Abu Dhabi Airport Authority could be interested in the airport. Macquarie owns and operates significant several major international airports, said the source, while Hochtief and Albertis failed in bids for Midway. Abu Dhabi Investment Authority has also expressed interest in the space.

John Schmidt, a partner with Mayer-Brown LLP in Chicago and an active participant in privatization, confirmed that Macquarie, Hochtief, and Albertis could all be interested in the project, adding that Morgan Stanley, KKR, and Blackstone have raised significant infrastructure funds.

Federal statute prevents the privatization of more than five airports in the United States, said Schmidt, and only one can be a hub. ”It would depend on whether the Midway privatization goes through again, as BWI is much larger than Midway.” New Orleans, Louisiana and San Juan, Puerto Rico have both received preliminary approval from FAA to privatize their airports. However, if Midway goes through, and Maryland still wants to privatize, Schmidt said that it should not be difficult to amend the statute.

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