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WDF auction fast approaching

Published:  23 July, 2008

The process of auctioning off of BAA's chain of World Duty Free (WDF) shops is gathering steam.

Last month, the airport operator instructed Merrill Lynch - which is handling the sale of WDF - to send out a sales prospectus to any interested buyers, a Daily Telegraph article reported.

It is thought WDF has an annual turnover of 440 million with pre-tax profits of 30m - private equity groups such as Permira and CVC have also been linked to a WDF first round bid.

An industry insider told the paper: "With a 12-year lease you can run the business for three years before selling it on, which is the private equity model. It will be interesting to see who gets involved."

Analysts have already said that a 450m price tag for a 12-year-lease on WDF's 65 shops would not be unreasonable.

WDF operates across seven UK airports employing around 2,000 staff - some 20% of its profits are accounted for by sales of spirits.

Ferrovial, which owns WDF's parent company BAA, signaled its intent to offload the chain of stores late last year.