Beijing Capital International Airport strategic shareholder Aeroports de Paris is selling its entire stake through a placement expected to raise at least HK$2 billion, capitalizing on the share price gains following news of an A-share issue and asset acquisitions from the parent company.

Aeroports de Paris said it is seeking to sell about 253 million shares of Beijing's international airport operator at between HK$7.77 and HK$7.90 per share. This represents a discount of between 4.8 percent and 6.3 percent to Feb. 26's closing price of HK$8.30. Morgan Stanley is arranging the deal.

In a statement on Feb. 26, Aeroports de Paris confirmed the number of shares being sold but did not give further financial details. "It is a financial decision of Aeroports de Paris," said a spokesman for the French company.

Beijing Capital International Airport's share price surged more than 32 percent in the last two weeks of 2006 and hit a record high of HK$8.67 on Feb. 23.

Aeroports de Paris has been a shareholder in Beijing Capital International Airport since its 2000 listing in Hong Kong. The company held the stake through a joint venture with France-based Vinci Airport. However, the partnership was dissolved in 2005 and Aeroports held the stake until it decided on the placement on Feb. 26.

Last October, the National Social Security Fund, the mainland's pension fund, sold 31 million shares of Beijing Capital International Airport, raising HK$87 million.

Beijing Capital International Airport has indicated the planned A-share issue is likely to be completed in the third quarter.

In a recent research report, Credit Suisse said Beijing Capital International Airport's strong price performance may allow the airport operator to set a higher price for the A-share float.

But Karen Chan, analyst at Credit Suisse, cautioned that "despite this mild potential positive, the stock looks expensive, trading at over 30 times 2008 earnings."

Credit Suisse forecasts Beijing Capital International Airport 2008 net income at 1 billion yuan.