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UPDATE 1-Hochtief airports unit IPO possible this yr -sources

Published 09/22/2009, 12:12 PM
Updated 09/22/2009, 12:18 PM
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* Hochtief has picked shortlist of banks - sources

* Shares rise 2 percent

(updates with shares background)

FRANKFURT, Sept 22 (Reuters) - Hochtief is preparing an initial public offering of its airports division which it could launch by the end of this year, several financial sources told Reuters on Tuesday.

The issue would be Germany's first major IPO since diesel engine maker Tognum's 2.1 billion euro ($3.1 billion) listing in 2007, before markets were crimped by the global economic crisis.

Hochtief said last month it was considering selling shares in the division, seen by analysts as a move that might shore up the company's market value. It values the unit, which it calls Hochtief Concessions, at 1.54 billion euros.

Hochtief shares closed up 2 percent at 53.70 euros, while the German midcap index rose 1.4 percent.

Germany's largest builder has already picked a short list of banks that could manage the IPO, including Deutsche Bank, Commerzbank, Morgan Stanley, HSBC and WestLB, the sources said.

Hochtief could award a mandate within weeks, they said. The firm declined to comment on mandates.

Hochtief's airports division generated a pretax profit of 110 million euros in 2008, making it the second-largest earnings generator among Hochtief's six divisions.

It holds stakes in airports in Athens, Hamburg and Sydney and operates roads in Austria and Greece as well as schools in Germany.

Its competitors include Ferrovial's British airports operator BAA as well as Frankfurt operator Fraport and Vienna's Flughafen Wien.

IPO ICE BREAKERS

Investment bankers on Tuesday said the IPO pipeline in Germany was filling up again, ending a drought that started with the onset of the financial crisis in 2007.

"We could see an outright wave of IPOs in the first half of 2010," said Joachim von der Goltz, JP Morgan's head of equity capital markets for German-speaking regions, adding that the market was seeing considerable demand from investors.

"We expect one or two big deals with billion-euro volumes that will serve as ice-breakers for others," he said.

Financial investor BC Partners plans to float part of German chemical distributor Brenntag in the first half of 2010, several sources familiar with the situation told Reuters on Tuesday.

(Reporting by Philipp Halstrick, Kerstin Leitel and Matthias Inverardi; Writing by Maria Sheahan and Jonathan Gould; editing by John Stonestreet)

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