All Hands on deck as Terra Firma plots Wightlink bid

The private equity tycoon Guy Hands has lined up the erstwhile boss of Associated British Ports to help him sail into a £300m bidding war for Wightlink, the British ferry operator.

Sky News has learnt that the Guernsey-based financier's Terra Firma Capital Partners is working with James Cooper, the former ABP chief executive, on an offer for the company.

Mr Hands' move puts him into competition with Mayfair Equity Partners, the owner of Yo Sushi, which has also lodged a bid for Wightlink.

The interest of private equity firms in a takeover of the operator of ferries between Hampshire and the Isle of Wight has sparked concern from the local MP, Bob Seely, who has written to Wightlink about its corporate structure and tax affairs.

Speaking to Sky News, Mr Seely said he had copied his letter to government ministers.

He said: "I have to say that if [a private equity buyer] takes the same attitude as previous owners and seeks to asset-sweat Wightlink rather than develop a long-term plan, I will be opposing the sale and highlighting my reasons for doing with the new owners and with government.

"What assurances will you give that any new owners will act in a responsible way and see Wightlink as a vital public service?

"What concerns me is that Wightlink has been up for sale without any reference to the interests of the Island."

Mr Seely said suggestions of a £300m price tag for Wightlink "seem remarkably inflated [which] I assume is due to profit forecasts which make Wightlink highly attractive, that it is in effect a duopoly and that if you live in some parts of the island, it is an effective monopoly".

In addition to Terra Firm and Mayfair, Arcus Infrastructure Partners, another investor, is thought to have been examining a bid for Wightlink.

A deal is likely to cost any eventual buyer substantially more than the £230m paid by Wightlink's current owner, Basalt Infrastructure Partners, in 2015.

The auction comes a year after the rival ferry operator, Red Funnel, was sold to investors including the West Midlands Pension Fund.

Investors have continued to plough capital into UK infrastructure assets because of the attractive returns they offer in an environment in which interest rates continue to be subdued.

Some categories of infrastructure investing, such as the water sector, have nevertheless begun to see a slowdown in significant deals amid concerns about the threat of renationalisation from a Labour government led by Jeremy Corbyn.

International infrastructure funds have also raised concerns about Brexit-related uncertainty dampening their appetite to deploy funds in the UK.

A sale of Wightlink is expected to conclude in the early part of next year.

Basalt is being advised by bankers at Macquarie, the Australian investment bank which itself used to own Wightlink.

Terra Firma declined to comment.