Top European Airport Operators Submit Bids for Turkey’s Dalaman

(Bloomberg) -- European airport operators including Ferrovial SA and Vinci SA are among bidders for a concession contract in Turkey, according to five people familiar with the situation.

Fraport AG and Aeroports de Paris are among other companies and investors that have also submitted non-binding offers to run Dalaman Airport on the country’s Mediterranean coast, said the people. They asked not to be identified because the process is confidential. The contract is being auctioned by YDA Group, a closely held Turkish conglomerate with investments spanning construction to energy.

Initial offers from three of the bidders -- including ADP and Vinci -- averaged about 290 million euros ($321 million), four of the people said, representing the market value of the contract plus net debt. Madrid-based Ferrovial was an outlier, with an offer of around 435 million euros, they said.

The concession is being sold two months after the owners of another giant $11 billion airport in Istanbul dropped a plan to sell a stake in the venture. That opened a window for YDA to seek buyers so it can raise cash for other investments, such as hospitals, real estate or agriculture. YDA has been operating Dalaman’s international terminal since 2006, and in 2014 secured another contract to also run domestic flights for 26 years.

A second round of bids will be collected later this month or January, the people said. Frankfurt-based Fraport co-operates an airport in southern Turkey’s tourist resort of Antalya, while ADP runs several airports in Turkey through its local unit TAV Havalimanlari Holding AS. Vinci, Ferrovial, ADP and TAV declined to comment.

“Fraport has been successfully active in the Turkish market for two decades. We are watching market developments closely,” company spokesman Robert Payne said, declining to elaborate.

“We haven’t started a formal negotiation process yet,” YDA said in an emailed response to questions, declining to comment further. Ankara-based YDA hired Istanbul-based investment bank Unlu & Co. to advise on the contract.

Dalaman is designed to handle 10 million passengers a year, according to YDA. The airport, the seventh-largest in Turkey, served 4.6 million passengers in 2018, up 23% from a year ago.

To contact the reporters on this story: Ercan Ersoy in Istanbul at eersoy@bloomberg.net;Asli Kandemir in Istanbul at akandemir@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, ;Onur Ant at oant@bloomberg.net, ;Benjamin Harvey at bharvey11@bloomberg.net, Vernon Wessels, Hilton Shone

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