Madrid/London, April 8 (Reuters): Spanish construction firm Grupo Ferrovial launched a ?8.75-billion hostile bid for BAA on Friday as it looks to bulk up in the booming European airports sector.
BAA, which runs Heathrow, Gatwick and Stansted airports, rejected the 810-pence-a-share cash offer from Ferrovial’s bidding consortium, which was pitched at the same level as a non-binding proposal turned down by BAA last month.
“(It is) the same price that the board has already emphatically rejected as not beginning to reflect the true value of BAA’s unique portfolio of strategic airport assets,” BAA said in a statement.
BAA shares closed up 1.5 per cent at 847p after touching a new high of 855p, signalling investors expect a better offer, or for BAA to keep shareholders on side by, for example, returning cash to them. Ferrovial shares closed down 2.4 per cent at 67.1 euros, valuing the firm at 9.4 billion euros (?6.5 billion).
“We fully support the board’s (BAA’s) rejection of the cash offer at 810 pence from Grupo Ferrovial,” Robert Waugh, head of UK equities at Scottish Widows Investment Partnership (SWIP), said in a statement. SWIP owns about 3.4 per cent of BAA.
F&C Asset Management, which owns about 1.75 per cent of BAA, also said 810p-a-share was too low.
Ferrovial is bidding with Caisse de Depot et Placement du Quebec and Singapore’s GIC Special Investments and is advised by Australia’s Macquarie Bank, to whom it will sell stakes in Sydney and Bristol airports if the bid goes through.
Ferrovial said if it bought BAA it intended to focus on Britain and boost capacity, particularly in southeast England.
The country’s aviation regulator, the Civil Aviation Authority, reiterated on Friday that bidders for BAA should plan for major upgrades to airport facilities when arranging their financing.
European airports have been drawing investors attracted by a highly visible, long-term outlook which predicts traffic in Europe will double by 2020 to 2 billion passengers. BAA fought off Germany’s Hochtief in December to buy control of Hungary’s Budapest airport from the state for $2.2 billion (?1.23 billion).
BAA is the latest in a string of firms to attract a foreign bidder amid a global boom in takeover activity.
