BAA rejects Ferrovial”s takeover advances

24 April 2008

Baa, Which Operates Seven Airports In The Uk, Has Rejected A takeover bid from a consortium lead by Ferrovial, which valued the company at UK£ 8,75 billion (€ 12,6 billion). Australian investment bank Macquaire was also thought to be considering a making an offer for BAA, which could start a bidding war.

Ferrovial's UK£ 8,10 (€ 11,67) per share bid in mid-March came after several weeks of stock market rumours. The company said the offer represented a 32% premium on BAA's average share price of UK£ 6,37 (€ 9,17) in the 30 days of trading preceding these rumours.

However, BAA's Board is reported to be holding out for an offer of as much as UK£ 9,00 (€ 12,96) to UK£ 10,00 (€ 14,40) per share, before it would endorse any deal. That would value the company at between UK£ 9,72 billion (€ 14,0 billion) and UK£ 10,8 billion (€ 15,5 billion).

BAA's portfolio includes Heathrow and Gatwick airports, and it claims more than an 80% share in international air passenger traffic in the UK. The group recorded revenues of UK£ 2,11 billion (€ 3,05 billion) in the 2004/5 financial year.

BAA is also one of the UK's largest construction clients, with plans to invest UK£ 5 billion (€ 7,20 billion) in infrastructure between 2004 and 2009. Construction of Heathrow's BAA-owned UK£ 4,2 billion (€ 6,05 billion) Terminal 5 is thought to be the largest construction project currently underway in the UK.

Ferrovial's consortium comprises Ferrovial Infraestructuras, a subsidiary that operates road and airport infrastructure, Caisse de Dépôt et Placment du Québec (CDP), a Canadian pension fund, and GIC Special Investments, a Singapore-based investment company.

Ferrovial Infraestructuras owns 100% of Belfast City Airport in the UK province of Northern Ireland, and also has stakes in Bristol Airport in the UK and Sydney Airport in Australia. Ferrovial also owns Swissport International, which operates various services at more than 180 airports worldwide.

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