Li Ka-shing closes in on a stake in Manchester Airport

Cheung Kong Infrastructure Holdings Limited (HKG:1038), or CKI, the infrastructure investment vehicle controlled by Hong Kong billionaire Li Ka-shing, has been left with one rival in the race for a stake in UK airports operator Manchester Airport Group Plc (MAG), the Sunday Times reported without specifying its sources.

CKI is vying with Australian infrastructure fund Industry Funds Management, the newspaper said, adding that the joint venture set up by 3i Infrastructure Plc (LON:3IN) and the Abu Dhabi Investment Authority was no longer in the picture.

The group of sellers, which comprises ten local authorities, is looking to raise as much as GBP1bn (USD1.6bn/EUR1.2bn) from the stake sale, using the money to pursue its own acquisition target. The target in question is Stansted airport, whose owner BAA Airports Ltd is expected to put it on the block later in 2012.

The sellers plan to establish a joint venture with the new investor but that would be conditional on success in the Stansted campaign. According to the Sunday Times, the new partner would be given an equity stake of 35% but would get 50% of the voting rights in the joint venture as a sweetener. MAG’s board gathered last week to pick a preferred bidder and is expected to announce its decision any moment now, the newspaper added.

Li, the richest man in Asia, is the biggest foreign investor in the UK. He is the owner of mobile phone operator 3, water utility Northumbrian Water, retail chain Superdrug and the Felixstowe port. If he emerges successful in the race for MAG, it would be his first investment in airport assets.