baa

Ferrovial group wins showdown for BAA
By Kevin Done in Paris and Lina Saigol in London
Monday Jun 5 2006 20:55

BAA is expected to contend today that other conditions attached to the bid made the Ferrovial offer a superior deal. It would still be open to the Goldman Sachs consortium to return to try to win BAA board backing, however, for a higher offer by Friday or any later deadline agreed by the Takeover Panel.

The Goldman-led consortium last night appealed to the Takeover Panel on the grounds that Ferrovial had breached the 60-day timetable. The Ferrovial offer values the BAA equity at £10.3bn. Together with net debt of £5.3bn it places an enterprise value on BAA of £15.6bn, making it one of the largest foreign takeovers of a FTSE-100 company.

It will be the biggest takeover ever made in the global airports industry, where BAA has widespread interests including seven airports in the UK and other operations in Hungary, Italy, Australia and the US. If Ferrovial succeeds in closing the deal it could face a far-reaching investigation by the UK Office of Fair Trading, which potentially could lead to the break-up of BAA's London airports monopoly.

The race between the Spanish and US-led consortia ended dramatically in a fierce bidding auction, in which the US investment bank was finally outmanoeuvred by the "pace and decisiveness" of the Ferrovial bidding team, according to one close observer.

For the first time in nearly 17 weeks of fighting off the Spanish predator – Ferrovial's interest in acquiring BAA was first disclosed on February 8 – the UK airports operator was finally cornered yesterday.

BAA has previously rejected overtures from both consortia, but in a day of high drama it managed to engineer an auction between the two sides, as the Ferrovial consortium approached a midnight deadline set by the Takeover Panel code for sending out its revised offer document to BAA's 350,000 shareholders.

BAA had previously rejected both Ferrovial's last offer of 900p a share, made last week, and a "preliminary, highly conditional" approach at 870p a share made by the Goldman Sachs consortium at the end of March.

The Ferrovial consortium was advised by Citigroup and Macquarie Bank. BAA was advised by Rothschild and UBS, while the Goldman group was also advised by Dresdner Kleinwort Wasserstein alongside Goldman Sachs.