Midnight talks seal BAA's fate


Spanish services sector firm Ferrovial appears to have won the bidding war for airports operator BAA.

Following late-night talks as the midnight deadline for Ferrovial to finalise its takeover offer approached, the Spanish firm valued BAA at £10 billion, offering 950.25p per share as well as a 15.25p per share dividend for shareholders.

BAA said it had "agreed" the offer in a statement issued this morning. "The board believes that an offer at this level represents an attractive price for BAA… the board will make a further announcement shortly," the company said.

Reports suggest that BAA's chief executives are urging their shareholders to accept the offer.

BAA, which controls British airports including Heathrow, Gatwick, Stansted and Glasgow, had been eyed by a Goldman-Sachs-led consortium which had its 900p per share offer rejected on Friday.

Following yesterday's announcement that the Commonwealth Bank of Australia has joined the consortium, boosting its potential offer price as it approached its own final deadline this Friday, many expected Goldman Sachs to win through.

Instead it was Ferrovial's dramatic increase in their bid which sealed BAA's fate last night. Ultimately BAA, which had previously made it known that only an offer exceeding 940p per share would be acceptable, only responded positively when the bidding decisively rose above that price.

Investment potential from retail, rental and advertising revenue boosting fees from airlines for take-offs and landings were the main factors driving the bidding war for the British airports operator.

With BAA planning to invest £9.5 billion in its expansion programme during the next decade, Ferrovial is likely to be content with the investment potential of its new acquisition.

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