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Bid in for TBI?

Old 14th Aug 2001, 16:13
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Post Bid in for TBI?

Owners of BFS amongst others! Seems someone has faith in us!!

LONDON (AFX) - TBI PLC shares soared nearly 50 pct in morning trading after
French group Vinci SA announced it has purchased a 14.9 pct stake in the UK
airport operator at 90 pence a share and is considering making a cash offer at
the same price.
Vinci, a Paris Bourse listed construction, concessions and associated
services group, said it is hopeful that it can obtain the recommendation of the
TBI board for such an offer.
At 9.46 am TBI shares were marked up 29-1/2 pence at 89-1/4.
TBI said it is considering Vinci's announcement and recommended shareholders
take no action. The group said they should wait for a considered response from
its directors.
Industry sources told AFX that Vinci made a 'friendly' approach to TBI three
weeks ago and again yesterday morning. On both occasions it received short
shrift from TBI's directors. The French group then moved to acquire the 14.9 pct
stake (83,250,000 shares) from TBI's largest institutional shareholder Schroder
Investment Management.
On August 3 TBI shares slumped 14 pence to 63-1/4 pence after it warned that
BMI British Midland's withdrawal of its Heathrow and East Midlands services from
TBI's Belfast International Airport would hit profits this year by up to 2 mln
stg and next year by 6 mln stg.
The industry sources said Vinci's first approach to TBI preceded the airport
operator's August 3 profit warning.
Analysts anticipate that TBI will likely say that it regards Vinci's
approach as opportunistic. However, they do not expect the French group to go
away now that it has acquired a near 15 pct stake.
But they pointed out that some 20 pct of TBI's shares are held by chairman
Stan Thomas and his family, which provides a useful base from which to mount any
defence if Vinci was to go hostile.
Vinci, formerly Societe Generale d'Entreprises, was the construction arm of
Vivendi Universal, from which it became independent in February 2000. In July
2000, Vinci merged with GTM, one of its close competitors in France.
As of August 13 Vinci had a market capitalisation of around 5,777 mln eur.
For the year to Dec 31 2000 it recorded a turnover of 17,331 mln eur.
As part of its concessions business, Vinci has accumulated substantial
experience in airport management. The company has a portfolio of investments
in 26 airport concessions serving over 40 mln passengers around the world.
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Old 14th Aug 2001, 21:27
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Thumbs down

TBI run Luton, if the take-over happens this will make the 4th change of management in the last 4 years. Not good me thinks.
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Old 18th Aug 2001, 16:21
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From today's Scotsman:

EasyJet boss on the attack over Luton
Andrew Murray-Watson

THE chief executive of budget airline easyJet has attacked Vinci’s attempt to take control of Luton Airport, warning the French giant was "living in cloud cuckoo land" if it expected to retain current airport handling fees.
Vinci’s £516 million hostile bid for Luton airport owner TBI is conditional on a settlement being reached with easyJet on passenger and baggage handling terms "no less favourable" than the current contract.

The no-frills operator is currently locked in talks with TBI to reduce the £5.50 landing charge and 50p baggage handling charge its levies for every easyJet passenger passing through the airport.

Speaking to The Scotsman, easyJet chief executive Ray Webster categorically stated that Vinci had "clearly not been briefed on the seriousness of the situation".

He added: "We have made our position quite clear all along.

"We agreed this current interim deal under sufferance, because we had little option.

"We have mothballed further investment at Luton until landing charges are reduced and infrastructure improved.
"Clearly this is not going to be plain sailing and if Vinci thinks it can get an improved deal it is clearly living in cloud cuckoo land."

He said that capacity would be taken away from Luton unless easyJet received an improved offer in a move that could pave the way for more routes from Edinburgh and Glasgow airports.
Webster’s remarks hit TBI’s share price. At close yesterday its stock was trading down 2p, or two per cent, at 96p as investors weighed the risks of Vinci’s bid failing.

The airport operator’s share price had reached 100p on Wednesday as speculation mounted of a counterbid after TBI said it had received expressions of interest from unnamed parties.
Merrill Lynch analyst Marcus Curley said that easyJet’s comments did not necessarily mean Vinci, the world’s largest construction company, would withdraw its offer.

"Even if they signed an agreement which is below the current terms that gives Vinci an out, it doesn’t mean that they will withdraw their bid because they just want to make sure that there is some protection," he said.
Commenting on the current £5.50 landing charge, the easyJet spokesman added: "We said in our prospectus last year that we thought 550 pence as a base rate was totally unacceptable. We’ve said it to anybody who will listen and we’ve said there will be no further growth out of Luton if we are forced to a deal at that amount.

"But Vinci obviously haven’t done their homework on easyJet and its history of paying landing charges at Luton if they expect to get more," he said.
Vinci, which unveiled its 90p per share offer on Wednesday, said it was unconcerned about the easyJet comments.

A spokesperson for Vinci said: "These negotiations have nothing to do with Vinci. They are between easyJet and TBI."

TBI has already rejected Vinci hostile bid as inadequate.

The operator also owns Belfast airport, Cardiff, Sweden’s Skavasta, three Bolivian airports and Florida’s Orlando Sanford.

It lost almost one-fifth of its value two weeks ago, after warning profits would be hit by BMI British Midland’s withdrawal from Belfast.
Old 18th Aug 2001, 17:07
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So how much does Easyjet pay for using GLA, EDI, AMS etc….I don’t see them complaining about fees at any other airport. TBI has found out to its cost that by giving discounts to low cost airlines at Belfast it has lost one of its core airlines that pays the bills.
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Old 18th Aug 2001, 22:48
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Stelios has to put a spanner in the works everywhere he goes.

Stelios, face it, you still pay alot less than any other operator out of LTN, so wind your neck in.
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Old 19th Aug 2001, 13:26
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From today's Sunday Times:

Australian group in bid for TBI aiports

John Waples

French raid shakes up regional airports firm

MACQUARIE, the Australian investment bank that specialises in infrastructure projects, has approached TBI, the regional airports owner, about tabling a rival takeover offer.

The Australian company, which is valued at £2.4 billion, last year put together a consortium to acquire Bristol airport for almost £200m. It is keen to build a portfolio of international airports and has recently been looking at several opportunities in Europe.

Grupo Ferrovial, a Spanish construction group that partnered Macquarie in the Bristol purchase, is also believed to have been in contact with Keith Brooks, TBI's chief executive, in the past three days.

Last Wednesday TBI found itself on the receiving end of a £516m bid from Vinci, the French construction group, valuing the company at 90p a share. But the market remains convinced that a higher offer will materialise and the share price closed on Friday at 95p.

Fraport, the £1.8 billion quoted German group that owns Frankfurt airport, has also contacted Brooks and could emerge as a rival bidder. Brooks last week rejected the offer made by Vinci and put his group up for auction.

TBI's assets include Cardiff airport and Belfast International, as well as a majority stake in Luton airport.

Analysts at WestLB believe that if a bid battle develops, the eventual take-out price could be as high as 115p. They said: "There are good reasons why a higher value could be achieved as the scarcity value of Luton and the potential savings to a bidder are not fully reflected in the price."

The broker believes that closing TBI's London head office could cut overheads by £7m.

International interest in Britain's regional airports is high. There were more than 20 other bidders for Bristol airport and there
was also strong interest when Stagecoach sold Prestwick airport near Glasgow.

Macquarie has deep pockets and has already raised nearly £250m for an airport investment fund.

TBI is taking the approaches it has had seriously, but so far no company has officially declared that it will mount a rival bid.

Vinci, which owns 26 airport concessions around the world, is working on its offer document and its position has been helped by the acquisition of a 15% stake in TBI from Schroder. It is already sitting on a handsome paper profit from these shares.

Vinci's offer is conditional on TBI renewing the contract it has with Easyjet at Luton. It handles the passengers and baggage for the low-cost airline.

A Vinci spokesman said: "The contract is a critical part of TBI's earnings and if it were materially less it would have a huge impact on the value of the company."
THE French have never been shy of making a play for some of Britain's prized assets. They already control a large slice of our water, building-materials and insurance
businesses. Now they are casting an acquisitive eye over our airports.

Vinci, the French construction giant, last week swooped on TBI, Britain's biggest owner of regional airports. Vinci picked up a 15% stake from Schroders, TBI's second-largest
investor, on Monday - and within two days had launched a £516m hostile bid (excluding debt of £160m), valuing its target at 90p a share.

The offer was pitched at a 50% premium. However, if Vinci wants to take control of the company, analysts say it will have to pay more than 100p a share. TBI's shares closed the week at 95p, valuing the company at £550m. The share price has been buoyed by comments from Keith Brooks, TBI's chief executive, saying he has had approaches from other parties.

Brooks and Caroline Price, his finance director, have in effect put the company up for auction and its days as an independent
company are numbered. But whoever takes control, last week's bid marked a sad end for a company that started with so much promise.

TBI made its stock-market debut seven years ago after reversing into Markheath Securities, a struggling property company. TBI's biggest investor, Stanley Thomas, who made his fortune from a meat-pie business, wanted to build up a property investment company, but Brooks had other ideas.

He was one of the first to spot the huge opportunities in regional airports. He bought Cardiff airport in 1995 and later added Belfast International. Then he built up the portfolio by taking a controlling stake in Luton airport and making smaller airport
investments in Florida, Stockholm, Bolivia and Costa Rica.

TBI attracted a strong institutional following and sentiment was further helped when it became a focused aviation group after
selling its property portfolio for £190m in May 1999.

With the proceeds, TBI paid £86m for AGI, an American airport group, which at the time owned a 25% stake in Luton and had other airport assets. The deal was mainly funded through the issue of 65m shares, which made AGI's investors, including George Soros and Lockheed, big shareholders in the enlarged

TBI was one of the first companies to move into airports but soon the market became overcrowded. The big three transport groups - Stagecoach, National Express and Firstgroup - all moved in and the strong interest pushed up airport valuations.

This helped TBI's share price, but its status as a stock-market darling was shortlived. Since peaking at 126p in May 1998, its share price has yo-yoed and confidence has been knocked by several profit warnings. The latest was earlier this month when BMI British Midland pulled out of operating from its Belfast airport.

Brooks said the decision would result in a 10% fall in earnings, but investors thought otherwise and the share price fell more than 30% to 57p.

Brooks knew TBI was vulnerable to an unsolicited offer. "Airports are medium to long-term businesses and I am convinced that our strategy will prove to be an excellent one. But at the moment the market does not appear to share that view," he said.

In mid-July, Brooks took a call from Warburg, Vinci's investment-bank adviser. The bank said it had a client interested in holding talks.

A meeting between Brooks and Antoine Zacharias, Vinci's chairman, was arranged in London and an offer was put on the table. At the time TBI's share price stood at 85p and the initial offer was pitched at a higher level than 90p. It was rejected by the board.

Zacharias moved back in for the kill when TBI's shares collapsed after the BMI move.

Last Tuesday, Jean-Luc Pommier, Vinci's corporate development director, and Christian Labeyrie, its chief financial officer, met Brooks at the City office of TBI's broker, Hoare Govett. Brooks was left in little doubt Vinci would go hostile the next day.

This is not the first time TBI has been the subject of bid speculation. Last year a consortium headed by Dermot Desmond, the Irish businessman who owns London City airport, made a tentative approach at 120p, but the talks fizzled out. Desmond remains an investor and he could return as a white knight.

Analysts say TBI will be no walkover. They believe the bid battle will boil down to what valuations are placed on the airports - and
Brooks is already doing his best to talk these up.
Old 28th Aug 2001, 14:52
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Irish Times, Finance

EasyJet talks may hold
key to TBI future

By Francess McDonnell
Negotiations over passenger and baggage charges, expected to resume today between airports operator TBI and low cost airline EasyJet, could be crucial to deciding the airport group's future, warned industry analysts.

TBI is the subject of a hostile £516 million sterling (€818 million) takeover bid from the French construction group, Vinci.

The British airports operator, owner of Belfast International Airport, has rejected the bid as "opportunistic" but the outcome of its discussions with EasyJet could be the decisive factor in whether the bid remains on the table.

In its formal offer document for TBI published last weekend, Vinci says its bid hinges on TBI securing an agreement with EasyJet over charges at Luton Airport "no less favourable" than its current arrangements. TBI charges EasyJet £5.50 per passenger and a 50p baggage-handling fee at Luton. Both parties have a Friday deadline to agree to a new arrangement at Luton Airport.

EasyJet chairman Mr Stelios Haji-Ioannou has said he wants the charges lowered but up to the emergence of Vinci, TBI had not appeared inclined to agree to his wishes.

Industry analysts say one way for TBI to dismiss Vinci would be to agree to lower charges for EasyJet but this could also undermine the group's business in the medium term.

Vinci has bid 90p sterling a share for TBI, the offer values the airports group at a 50.6 per cent premium to the group's closing price on August 13th, the last business day before the French group's expression of interest.

TBI's share price at the latest market close was 98.50p per share and city analysts believe a fair price for TBI is closer to 100p per share.

But in its offer document Vinci claimed that its 90p per share cash bid offered shareholders some certainty over what it criticised as TBI management's "record of disappointments".
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Old 30th Aug 2001, 19:00
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This from AFX


2001-08-30 15:49 GMT: TBI to make statement on easyjet/Luton agreement tomorrow

LONDON (AFX) - TBI PLC, the airport operator facing a 516 mln stg hostile bid from Vinci SA, the French construction giant, will make a statement tomorrow regarding its agreement with easyjet PLC at TBI's 71 pct owned London Luton airport, said a TBI spokesman.
The spokesman declined to give further details.

Vinci's 90 pence-a-share offer, launched August 15, is conditional on TBI reaching a binding agreement with easyjet on passenger and baggage handling fees at Luton on terms "no less favourable" than the current deal.

easyjet's current agreement, which sees it pay TBI 5.50 stg per departing passenger and 50 pence for their baggage, expires August 31.

easyjet spokesman Toby Nicol told AFX News that the airline is still talking to TBI.

"At the moment there's no indication as to which way those (talks) will go. There's one of three options. Either we'll say we haven't reached a deal or we have or we'll just extend the negotiating period," said Nicol.

Vinci posted its formal offer document to TBI shareholders on August 25. TBI immediately reiterated its rejection of the bid.

At 3.38 pm TBI shares were up 1/4 pence at 97.

[ 30 August 2001: Message edited by: WeatherJinx ]
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