Last year's impressive $550 million IPO on the Australian Stock Exchange (ASX) was just the latest evidence of Babcock & Brown's (B&B) metamorphosis from boutique lease arranger into principal investment businesses.
According to Giles Frost, co-head of UK infrastructure, "The changes in the ways the finance leasing market worked and, in particular, the reduced ability to create advantageous cross-border deals promoted the pace of change. As work diminished in one area, it grew in others. We are now a significant global developer of and investor in assets."
The success of the IPO, from which Babcock & Brown received close to $6 billion in orders, coupled with overlapping business interests has brought with it a number of back-handed comparisons with Macquarie. And it is fair to say that both groups have similar growth strategies.
Back to its US roots
Nowhere is this more evident than in the US toll road market. Babcock & Brown is currently bidding on the Indiana toll road concession, which it hopes will be its break-through deal. The only problem is that Macquarie Infrastructure Group (MIG) and Cintra, the concession-holders to the massive $1.83 billion Chicago Skyway project and the main toll road competition in the US, stand in its way.
Although the State of Indiana is tight-lipped about the project, the principal bidders are: Cintra with Macquarie, FCC and Sacyr's Itinere have submitted independent bids, while Abertis has joined forces with local Washington Group International. Other bidders include Autoroutes du Sud de La France, Italy's Autostrade, as well as Hong Kong-based...
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