The UK airport operator, BAA, has received 6 indicative bids for acquisition of London Gatwick, the second-largest airport in the UK.

However problems of fund availability, terms of debt, cost and falling passenger traffic are likely to depress bids.

Parent company Ferrovial of Spain and BAA have been expecting offers of £2bn, but bidders have indicated that the winning offer was not likely to go beyond £1.8bn.

Some bidders were unhappy with terms of a £1.1bn acquisition debt package put forth by BAA’s advisers HSBC and RBS. They described the package as unattractive on account of short maturity period of 18 months and risks associated with refinancing of the deal.

The list of indicative bidders includes: the UK private equity group, consortium of Canadian pension fund along with 3i, European Infrastructure Fund, Global Infrastructure Partners, Gatwick Future Partnership, RREEF, Lysander Gatwick Investment, a consortium comprising of Canada’s Vancouver Airport Services and Citi Infrastructure Investors, the Deutsche Bank infrastructure fund; Manchester Airport Group and Hochtief, the largest construction group of Germany.

Ferrovial, which acquired BAA in 2006, is racing against time for sale of Gatwick to pre-empt outcome of investigations into structure of BAA by the UK competition watchdog. Final report is expected in early March.