Arcus circling Macquarie’s Condor Ferries

08 July 2019 - 12:42 pm UTC

Arcus Infrastructure is circling Condor Ferries ahead of the deadline for first bids for the Channel Islands-based ferry operator, sources said, the latest move by the UK-based infrastructure investor to target the sector.

 

Condor’s owner Macquarie Infrastructure and Real Assets (MIRA) earlier this year appointed Rothschild to explore options for Condor including a sale of the business. Two sources following the process said Arcus is considering a bid for the company, with one adding that Arcus earlier in the year held bilateral talks with MIRA about buying Condor.

 

MIRA bought Condor, which owns four vessels, in September 2008 from RBS for around GBP 260m in a deal worth 10 to 12 times its EBITDA at the time. It owns Condor through its Macquarie European Infrastructure Fund II (MEIF II). First round bids for Condor are due next month, sources said.

 

Reports have also said that France’s Brittany Ferries, which operates routes between England and France, is looking to bid for Condor. One source said that Brittany Ferries has appointed BNP Paribas and global management consultant LEK Consulting to advise on a bid for Condor. Brittany Ferries declined to comment. 

 

Industry observers said that Condor Ferries could be unlikely to attract the same investors that have targeted recent ferry sales due to being a more challenging business. 

 

“You’re probably unlikely to see pension fund type money going for Condor because it is not really a passive investment, but one that needs some work,” said one. 

 

People following the process noted that Condor’s main vessel, Liberation, has had issues, such as being detained by the Maritime and Coastguard Agency in 2016 over safety fears. They also pointed to the age of Condor’s fleet. Unlike other ferry companies, it has not launched any new ferries recently, with Liberation, built in 2010, its newest ferry. 

 

MEIF II matured in 2016 but was extended by two years. Macquarie declined to comment on whether MEIF II has made arrangements to extend this. One person following the process said that MIRA has not stopped receiving fees from its investors for managing their investments in Condor.

 

Arcus’ interest in Condor comes after it late last year held talks about investing in Isle of Wight ferry operator Wightlink, as reported. Wightlink’s owner Basalt eventually sold a 50% stake in the company to Fiera Infrastructure.

 

Arcus also formed a consortium with Swiss Life to bid for Norwegian ferry operator Norled, according to one source but lost out to another consortium combining CapMan Infra and CBRE Caledon, as reported

 

Although Basalt despite selling part of Wightlink remains interested in ferries, and recently increased its exposure to the sector with the acquisition of a stake in Sicily ferry operator Caronte & Tourist, it is not planning to bid for Condor, a source close to the situation said.  

 

Arcus did not immediately respond to requests for comment. MIRA declined to comment. 

 

Read more