Lysander consortium out of Gatwick bid

LONDON (Reuters) - Gatwick bidder Lysander Gatwick Investment Group confirmed on Wednesday it had been dropped from the battle to buy the London asset after sources told Reuters its bid was deemed too low.

"We have just been informed of this decision and it is bizarre in the extreme," a spokesman for the Lysander consortium said following the rejection.

"Our bid is the only one fully funded and will deliver the airport's promised capital expenditure," he added.

Sources familiar with the matter earlier told Reuters that Lysander had been eliminated from the bidding by airports operator BAA because of concerns about the value of its bid.

"BAA also had concerns surrounding the deliverability of the Lysander proposal," one of the sources said, adding that there were now just two bidders still in the race for the UK's second busiest airport.

BAA, majority owned by Spain's Ferrovial <FER.MC>, declined to comment. It put Gatwick up for sale in September to pre-empt a regulator-demanded breakup of the monopoly.

Gatwick's Regulated Asset Base, a way of valuing infrastructure assets, is 1.6 billion pounds, but analysts have said it is unlikely to fetch that much.

The Lysander consortium comprised Citi Infrastructure Partners, Vancouver Airport Services and John Hancock Life Insurance Company.

The two remaining bidders are Global Infrastructure Partners, the fund that owns London City Airport; and Manchester Airport Group (MAG), Canada's Borealis and the Greater Manchester Pension Fund.

(Reporting by John Bowker and Quentin Webb; Editing by Luke Baker and Jon Loades-Carter)

Article Published: 13/05/2009