BAA clears runway for Ferrovial


The consortium led by Ferrovial today took a further step towards its takeover of airport operator BAA by increasing its stake in the company, while at the same time a rival bidder was forced to drop out.

This morning the Spanish-based construction company bought more shares in BAA to give it a 16 per cent stake and the airport operator also confirmed that discussions with a consortium headed up by investment bank Goldman Sachs had "ceased".

Earlier this week Ferrovial appeared to have finally secured the takeover of BAA after a protracted negotiating process with its 935 pence per share offer, valuing the operator at £10.1 billion.

Although Goldman Sachs' bid was marginally higher at 940p per share, BAA is believed to have rejected it owing to the advanced stage of proceedings with Ferrovial and the better share options on the table for investors.

Consumer watchdog the Office of Fair Trading said last month it was concerned about competition within the UK aviation industry and was considering launching a review.

Speaking at his monthly press conference, the prime minister, Tony Blair, claimed the most important thing was securing "the best deal for the British consumer" via "the best possible management".

He said that "when government starts interfering… you don't succeed".

Earlier today BAA, which operates seven UK airports, revealed passenger numbers during May increased by 3.6 per cent year-on-year to give an annual total of 12.8 million.

Aberdeen airport experienced the greatest individual rise in air travellers, passenger traffic rising by 11.3 per cent while London-based Stansted was up 11.3 per cent.

The UK's busiest airports, Heathrow and Gatwick, had increases in passenger numbers of 1.4 per cent and 4.3 per cent respectively, while both of the most popular long-haul routes, to China and India, saw rises of 49 per cent and 58 per cent.

Last month BAA announced its intention to invest £9.5 billion in improving passenger services at Heathrow, Gatwick and Stansted over the next decade if investors rejected Ferrovial's overtures, with future investment plans now unclear in light of the group's imminent takeover.

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