The South African government was made an offer it could not refuse when Italian airport operator Aeroporti di Roma made a bid for a 20 per cent stake in the Airports Company of South Africa.

ADR's winning bid of R819 million (US$162 million) was some 40 per cent higher than the other bids, seeing off competition from frontrunners - the British Airports Authority, Amsterdam Airport Schiphol and joint bidders Flughafen Frankfurt of Germany teamed with Aéroports de Montréal of Canada.

The Italian offer puts the value of ACSA, the state-owned controller of the country's major airports, at more than R4.1 billion, which is more than double the government's estimate of R2 billion.

Disgruntled rivals say that cash clinched the deal, but a spokesman for Deutsche Morgan Grenfell, the government's transaction advisers, says that ADR was chosen for the package it offered. Transport Minister Mac Maharaj, under whose portfolio ACSA's nine airports fall, adds that although all the bids were attractive, 'we are satisfied we chose the best deal for our country'.

ADR will appoint three board members to represent it on the 12-member ACSA board and will second a number of executives to ACSA. ADR, which holds a 69 per cent share in ADR South Africa, has an option to buy another 10 per cent of ACSA within two years. A further 10 per cent will be offered to local empowerment investors, with 9 per cent earmarked for company employees and 10 per cent for the National Empowerment Fund. The government will sell its remaining shares through a public offering in some two years time.

Source: Airline Business