Hungary ups ante in Budapest Airport tussle with higher bid

Bloomberg

The owners of Budapest Airport are considering entering into formal negotiations to sell the hub to the Hungarian state after receiving a revised offer, according to people familiar with the matter.
A government-led consortium put forward a new proposal to purchase a majority stake in the airport, the person said. The offer, received at the end of September, is higher than the earlier bid but is still considered to be below market value when compared with similar deals. Bloomberg reported in July that Budapest Airport had rejected an earlier offer, deeming it too low. The airport’s owners are expected to set out their terms for entering into formal talks and due diligence this week, said the same person, adding that a final decision on whether to sell has yet to be taken.
Budapest Airport operator AviAlliance, a German-based airport management company which is also the biggest shareholder, declined to comment, as did Hungary’s Innovation and Technology Ministry, which is leading negotiations for the government.
Prime Minister Viktor Orban has sought to reduce foreign ownership in an increasing number of industries he considers strategic, and he has said the capital’s hub is key for tourism and broader economic development.
The government wants to conclude the purchase by the end of the year, the person said. Orban is under the gun to close the deal before parliamentary elections next year, with his ruling party and the united opposition tied in polls ahead of the most closely fought general ballot in more than a decade. The opposition has threatened to scrap several major business deals Orban has championed.
Budapest Airport’s owner until recently ruled out selling the lucrative hub but they’ve also expressed concerns about potential state retaliation if they didn’t agree to part with their stake. Most recently, the government has been stalling a request made this summer to reopen one of the hub’s terminals.