Infrastructure Giant Vinci Bids for Cairns, Mackay Airports

French infrastructure company Vinci is attempting to buy North Queensland Airports, owners and operators of Cairns (CNS) and Mackay (MKY) Airports. It follows Kohlberg Kravis Roberts & Co (KKR) and Skip Essential Infrastructure Fund recently closing a deal to buy 74.25% of Queensland Airports Limited, operators of Gold Coast (OOL), Townsville (TSV), Mt Isa (ISA), and Longreach (LRE) Airports.

The Australian Financial Review reports that Vinci had submitted a non-binding indicative bid for North Queensland Airports and is competing against Japan's Sojitz Corporation. The sellers are JP Morgan Infrastructure Partners and Macquarie's Infrastructure Fund. Vinci has previously tried and failed to buy Hobart (HBA) Airport and Queensland Airports Limited. However, it has significant airport experience elsewhere.

Vinci is a well-known concessions and construction company. It owns and/or manages over 70 airports in 14 countries, primarily in Europe and the Americas, but also Sihanoukville (KOS) and Phnom Penh (PNH) Airports in Cambodia and Kansai (KIX), Osaka (ITM), and Kobe (UKB) Airports in Japan.

According to the latest Australian Government's Bureau of Infrastructure and Transport Research Economics statistics, Cairns is Australia's seventh busiest passenger airport (in terms of passenger numbers) and Mackay is the 15th busiest. Mackay is solely a domestic airport, while Cairns handles a mix of international and domestic traffic. The two airports are expected to generate around AUD115 million this financial year and JP Morgan and Macquarie are asking for around AUD3 billion – representing approximately 26 times earnings.

Meanwhile, The Infrastructure Fund, State Super, and the Australian Retirement Trust have sold out of Queensland Airports Limited, whose four airports handle 8.2 million passengers annually. Among other things, the exiting owners oversaw the AUD500 million expansion of Gold Coast Airport, the redevelopment of Townsville Airport, and security upgrades at Mt Isa Airport.

KKR Australia and New Zealand Managing Director Andrew Jennings described the four airports as a "high-quality asset that provides critical services in a resilient market with strong macro tailwinds."

Photo: AeroSouthPacific