Ringwayman - from my limited understanding, you're saying that the Manchester councils went from a 100% ownership of a company with less debt, to a 64.5% ownership of a company with more debt.
UK company law generally requires that dividends should be paid to shareholders in the same proportion of the amount of the company that they own. As an example, if you own 10% of the shares you are entitled to 10% of the dividend. I am of course ignoring things like preference shares or unusual classes of shares (e.g. golden shares which are typically held by central Govt). The cost of servicing the debt may not be negligible. As to whether 100% of 3 airports or 64.5% of 4 airports plus £1bn of cash that can be used to complete on the purchase of STN is worth more, I don't know - company valuations / m&a is not really my speciality.
I am willing to accept that this may be a good deal for Manchester councils in the long term, but I would expect the dividend paid by MAG to the councils to be rather less predictable than it has been in the past.
Last edited by davidjohnson6; 20th Jan 2013 at 21:11.