(Repeats Monday story, no change to text)
* France to sell 60 pct of both Nice and Lyon airports
* Funds and airport operators lining up bids
* Nice airport valuation could top 1.5 bln euros
* Lyon airport worth an estimated 900 mln euros
By Freya Berry and Emiliano Mellino
LONDON, Sept 7 (Reuters) - Bidders are queuing up for the
privatisation of France's Nice Cote d'Azur and
Lyon-Saint-Exupery airports, four sources familiar with the
matter said, hoping to land growing returns on the back of
rising air traffic.
The sale of France's 60 percent stakes in two of the
country's busiest airports offers investors relatively stable
assets in a sector that increased passenger numbers by more than
5 percent last year to 3.21 billion, according to data from the
World Bank.
Competition between rival hubs and the airlines they serve
means that Nice, as the bigger and more developed of the two
airports, is the more attractive proposition, sources said,
citing its higher earnings and more popular routes.
The airport on the French Riviera is a trophy asset with a
total value of at least 1.5 billion euros ($1.67 billion), they
said, while Lyon could be worth about 900 million euros.
Prospective buyers, therefore, are likely to have to part
with at least 900 million euros and 540 million euros
respectively for the majority stakes on offer.
Among the interested parties identified by the sources are
Australian investment group Macquarie MQG.AX , London City
Airport backer Global Infrastructure Partners (GIP) and Industry
Funds Management, which already has minority stakes in Vienna
and Manchester airports.
Rome airport operator Atlantia ATL.MI , meanwhile, told
Reuters it is interested in Nice. ID:nL5N0XL2LC
Spanish infrastructure group Ferrovial FER.MC and airport
operator AENA AENA.MC , as well as Singapore Airport CHAP.UL
and Malaysia Airport, are also in the running, the sources said.
All the potential buyers cited by the sources either
declined to comment or did not respond immediately to requests
for comment.
SECTOR EXPERTISE
But for all the talk of an imminent feeding frenzy, two of
the sources said the field will be limited by the French
government insisting that any lead bidder must have expertise in
the sector.
The French agency that looks after state shareholdings did
not respond immediately to a request for comment.
Two further interested parties that would meet this
requirement by virtue of previous airport investments are
Canadian pension funds Ontario Teachers and Canadian Pension
Plan (CPP), the sources said. Both funds declined to comment.
Sovereign wealth funds including the Abu Dhabi Investment
Authority (ADIA), Singapore's GIC GIC.UL and Kuwaiti pension
fund Wren House are also waiting in the wings, with Nice their
preferred target, two of the sources added.
Representatives of Wren House and GIC were not immediately
available to comment and ADIA declined to comment.
French infrastructure fund Cube and Geneva Airport have
previously declared interest in Lyon, though the latter could
face resistance.
Local business leaders acknowledge that Lyon's proximity to
Geneva could bring cost savings but have expressed concern that
a deal would result in the Swiss airport keeping the
high-quality business routes while its French rival is left with
the bulk of the low-margin traffic.
EARNINGS MULTIPLES
Sector bankers said that Nice and Lyon airports could be
worth between 15 and 20 times annual core earnings (EBITDA) of
about 100 million euros and 60 million euros respectively.
The price paid for a minority stake in Toulouse Blagnac
airport last year equated to an earnings multiple of between 17
and 18, industry sources said.
A further guide on price will come from GIP's sale of London
City Airport, which could close by the end of the year at an
estimated 28 times earnings for a potential 2 billion pound
($3.05 billion) deal.
The lower multiple expected for the French airports is
partly because of a likely cap on the amount of debt bidders can
put on the asset to meet the price, as implemented in the
Toulouse sale, bankers said. Lyon also requires more capital
expenditure.
French infrastructure builder Vinci SGEF.PA , which lost
out to a Chinese-led consortium in the Toulouse auction, is
planning a joint bid with state holding company Caisse des
Depots et Consignations and insurer Predica for both Nice and
Lyon, two sources said. All three companies declined to comment.
Aeroports de Paris ADP.PA , another to have been pipped in
the Toulouse sale, has also said it could now turn its attention
to Nice.
Bankers said that Chinese buyers could also come in to the
reckoning for Lyon as it is the smaller of the two.
The remaining shares in each airport are 25 percent owned by
their respective local chambers of commerce, with 15 percent
split between local government authorities.
Bankers are currently pitching to the government to advise
on the sale, which is likely to launch this year and close early
in 2016, the sources said.
($1 = 0.6559 pounds)
($1 = 0.8975 euros)