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Last Updated: Sunday, 13 November 2005, 17:19 GMT
BAA moves in on Budapest airport
Budapest airport
Bids of more than 1bn could be tabled for the airport
Airports operator BAA is looking to extend its operations outside of the UK by bidding for a stake in Budapest airport, the group has confirmed.

The closing date for offers is Monday and BAA is expected to face competition from three other firms. The winner of the process will be named in December.

BAA operates seven UK airports and also has a majority stake in Naples airport.

The Hungarian government launched the current tender process in October after a previous sale attempt was aborted.

That process was called off after a Hungarian Court declared it illegal because airport management had failed to adequately consult its workers over the proposed sale.

Short listed

The latest tender process was launched in October, when the government invited the five companies short listed in the failed process to resubmit bids.

Last week, Australia's Macquarie Airports - the world's second largest publicly traded airport owner - pulled out of the process.

That leaves BAA facing two German firms - construction group Hochtief and Frankfurt Airport operator Fraport - as well as Denmark's Copenhagen Airports.

Speculation suggests any bid made for the Budapest site could exceed 1.6bn euros (1.07bn, $1.87bn), which is thought to have been the winning offer tabled during the aborted tender process. BAA has declined to say what its offer will be.

Under the deal the Hungarian government is offering a 75% stake in Budapest airport and a 75-year operating lease.

The airport is growing fast and is viewed as having lots of potential in the industry - partly because Hungary recently joined the EU.

The news comes just days after BAA unveiled plans to knock down Heathrow's Terminal 2 under plans to revamp the London Airport in time for the 2012 Olympics.

It also comes two weeks after the group said it was axing 700 jobs as part of a cost-cutting drive that aims to save 45m a year by 2008.

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