ADP Confirms TAV Stake Purchase
Aeroports de Paris confirmed on Monday that it would buy a 38 percent stake in Turkish airports operator TAV for USD$874 million and said the deal would boost earnings from next year.
ADP is paying 11.3 Turkish lira per share, a premium of 32 percent to TAV's latest closing price, in a deal that values all of TAV's equity at USD$2.3 billion, the French airport group said in a statement.
"This changes our size, bringing to 37 the number of airports in our portfolio, not counting Amsterdam, representing 180 million passengers," ADP chief executive Pierre Graff said in an interview.
"This puts us in the top two or three (airport operators) in the world."
He said ADP has no plans for similar acquisitions any time soon. "At the moment, I don't see other deals involving our core activities in the short-term."
TAV minority shareholders do not stand to benefit from the substantial premium in the deal. TAV CEO Sani Sener said he did not expect a mandatory tender offer for minorities’ shares.
ADP, which also recently won a concession to run and extend Zagreb Airport, said it expected to achieve double-digit returns on equity from the deal, adding that it would add to earnings per share as of next year.
The deal, in which ADP will buy 18 percent stakes from Akfen Holding and unlisted construction firm Tepe Insaat, will be financed using existing cash and already secured acquisition debt financing, ADP added.
As part of the deal, ADP will also buy 49 percent of unlisted construction company TAV Yatirim.
The deal gives ADP three seats on TAV Havalimanlari's 11-person board, Graff said.
One Paris-based broker called the offer "slightly expensive," saying it valued TAV at 20 times earnings, an average of 15 percent higher than European peers. Still, the broker said the deal did not rule out the possibility of ADP raising its dividend in the medium term.