If you think of Brexit and the end of December, you would likely be thinking of patience. At times that is the correct decision, but it also meant some asset values fall further than normal. A French company called Vinci which runs 45 airports in 12 countries, so hopefully they had done their homework and had a list of airports they would love to operate. One of the airports on the list was Gatwick which is Britain’s second busiest airport.
Vinci will buy 50.1% of the shares for $5 billion. The President of Vinci Airports Nicolas Notebaert said a few months ago we could not have dreamed of acquiring an airport in the London area for less than 20 times core earnings. The airport is located 48 kilometres or between a half hour to a hour south of London and serves 228 destinations in 74 countries and is a major base for EasyJet and British Airways.
Last year in London, there were 170 million passenger journeys, in top place was Heathrow, Gatwick handled about a quarter or 46 million passengers. Gatwick is an efficient airport so do not expect many changes.
Vinci is buying shares from existing shareholders – Global Infrastructure will sell half of its stake to own 21%; Abu Dhabi Investments will own 7.9%; California Public Employees Retirement System 6.4%; National Pension Service of Korea 6% and from Australia Future Fund Board of Guardians 8.6%.
Vinci has airports in France, Portugal, Britain, Sweden, Serbia, Cambodia, Japan, United States, Dominican Republic, Costa Rica, Chile and Brazil. In 2017 more than 180 million people went through the airports.
Linking to dividend paying stocks, every country in the world wants and has airports to move people around, when there are consistent flows of people that means there should be a consistent flow of revenues. Planes, people, and then add on- shopping, hotels, and sometimes living quarters. As long as people are going from place to place – a consistent revenue source is available which makes a good investment.
There are more questions than answers, till the next time – to raising questions.