BAA International not up for sale, says WDF's Riches

Tina Milton

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BAA global retail and World Duty Free managing director Mark Riches confirms BAA International will continue to expand in the US and will not be sold as part of the WDF deal

BAA International will not be put up for sale and will be kept separate from the World Duty Free sale process BAA global retail and World Duty Free (WDF) managing director Mark Riches confirmed to RavenFox.com.

He said: “BAA International is not part of the process at all – that business is flourishing and doing well and we are interested in bidding for other contracts and are doing so. North America is part of Ferrovial’s strategy; it has a business there already and certainly today it’s not on the agenda to do anything else but grow that business. It’s a good solid business which is well run by my colleague Mark Knight.”

The news comes after WDF verified that it had been put up for sale by Grupo Ferrovial yesterday, which bought the UK airports group BAA last year. Riches commented: “I don’t think it was a big surprise to everybody and it’s not as if we dropped a bombshell. People were aware of the deliberations and aware of the strategic review that Ferrovial had announced some time ago. So there was always the possibility that they would sell the business. Clearly it had to take care of a lot of sensitive issues such [those with] the CAA [Civil Aviation Authority] regulator and make sure that selling the business didn’t put it in more of a difficult position with some of the bigger issues it has to deal with.”

He added: “And it’s a great business and it’s not a business that is being sold for negative reasons. It will be much better to be a core business rather than a non-core business, as we are with the current owners. Whoever buys this company clearly is going to pay a sum of money for it and therefore it will be absolutely core to them. Ferrovial bought the airports as its core business and along with the airports came some subsidiary businesses. What is important is that there is a management team who are aware of the agenda and do whatever they can to make sure the outcome is right.”

He said the business would be sold as “an entire entity” and that the sale is being managed internally by a team of people who communicate with the “professional advisers” that have been appointed, which include Merrill Lynch. Although Riches was unable to confirm the length of the contract or if an RFP is available he said advisers will be sending out "teasers and confidential agreements". 

Riches said: “Length of contract is not for me to comment on - the CAA were quite clear on what they thought the length of contract should be and it wouldn’t be surprising if Ferrovial has taken note of that. I don’t think that has been confirmed.” The sale process is expected to be concluded by “mid-year” in 2008.

For further analysis of the WDF sale see DFNI December 15.