UAE sovereign wealth fund eyes Heathrow investment

THE UAE is in talks to buy a stake in Heathrow airport amid deepening economic ties between the Gulf Kingdom and Britain.

Mubadala Investment, an Abu Dhabi sovereign wealth fund, is reportedly weighing taking a stake after an approach by existing shareholder the European private equity giant Ardian.

No agreements have been struck yet and Mubadala may not ultimately go ahead with it, according to Bloomberg, which first reported the story.

Ardian and Saudi Arabia’s Public Investment Fund (PIF) bought 25pc of Heathrow from Spanish infrastructure company Ferrovial for £2.37bn last year, taking 15pc and 10pc stakes respectively. But shareholders accounting for another 35pc have exercised options to join the sale, so their positions must also be sold.

The talks come amid a flurry of UAE-backed dealmaking in Britain, after the Emirates swooped to become telecoms giant Vodafone’s biggest shareholder and an Abu Dhabi-backed media company sought to purchase The Telegraph. Both of those deals are being scrutinised by ministers, with the investment by e&, the UAE’S state telecoms operator, deemed a potential threat to Britain’s national security by Oliver Dowden, the Deputy Prime Minister.

Mubadala is overseen by Sheikh Mansour bin Zayed Al Nahyan, UAE vice-president and key backer of the media investment vehicle that is bidding for control of The Telegraph.

He is said to be funding 75pc of the £600m offer put forward by Redbird IMI, which is in limbo pending an investigation into the potential threat to press freedom by Ofcom.

The media watchdog is scheduled to deliver a report to Lucy Frazer, the Culture Secretary, by March 11 but she could then order months of further investigation by the Competition and Markets Authority, which could ultimately block the takeover. Redbird IMI has insisted it will protect The Telegraph from any UAE interference.

A wave of investment by oil-rich Gulf states into sensitive industries in the West more broadly has sparked alarm among some security officials.

Deals involving Abu Dhabi funds are viewed as particularly worthy of scrutiny as investment decisions are made by a small band of royals.