3i, Allianz considering €1.4bn Scandlines sale

PRIVATE EQUITY groups 3i and Allianz Capital Partners are considering the sale of Scandlines, hoping for up to €1.4 billion for a ferry group that carries 12 million passengers around the Baltic, according to sources.

London-listed 3i and the private equity arm of German insurer Allianz, which each owns 50 per cent of the company, have invited banks to pitch for the role of selling Scandlines next year.

The plan comes as pressure increases on private equity groups to sell some of their largest and most mature companies after a slow year for deals in 2012.

3i and Allianz Capital Partners bought Scandlines at the peak of the buyouts boom in 2007, paying €1.5 billions for the largest ferry group in the southern Baltic, alongside minority investor Deutsche Seerederei. 3i and Allianz then bought out their partner in 2010.

Scandlines sails the major passenger routes between Germany, Denmark and Sweden, carrying 12 million passengers, 2.7 million cars and 831,000 trucks last year.

The company had revenues of €611 million in 2011, up 8 per cent, and total earnings before interest, tax, depreciation and amortisation of €167 million, according to its annual report.

The business could attract interest from rival private equity houses, such as EQT or Triton, but could struggle to reach the €1.4 billion asking price, despite recent improvements in performance, two of the sources said.

Swedish ferries group Stena Line bought five longer-distance freight ferry routes from Scandlines earlier this year for an undisclosed amount but was unlikely to be interested in the whole business, they added.

“The longer-term picture is very uncertain. The biggest concern is the planned tunnel between Denmark and Germany,” one said.

An undersea road and rail tunnel between Germany and Denmark across the Fehmarn Belt is being planned for 2020. If it goes ahead, it would hit passenger numbers on one of Scandlines busiest routes.

The company has also been buffeted by high oil prices, aggressive price competition from toll bridges on some of its routes and faces a threat to its onboard retail sales as tax harmonisation between Germany, Denmark and Sweden reduces the incentive for passengers to buy wines and spirits. – (Reuters)