LONDON, March 10 (Reuters) - Spanish construction group Ferrovial (FER.MC: Quote, Profile, Research) is putting the finishing touches to a bid approach for British airport operator BAA (BAA.L: Quote, Profile, Research), possibly by next week, sources familiar with the situation said on Friday.
Rejecting market jitters that Ferrovial may walk away from an offer, the sources said the Spanish firm was working with Royal Bank of Scotland (RBS.L: Quote, Profile, Research) and Citigroup (C.N: Quote, Profile, Research) on a financing package for the deal, which analysts say could be worth as much as 9.5 billion pounds ($16.5 billion).
Ferrovial, a construction company which already owns two stakes in airports in Britain, said last month it was considering a cash bid for BAA Plc as part of a consortium.
Shares in BAA, which owns London's Heathrow, Gatwick and Stansted airports, rose 3.7 percent to 804 pence at 1143 GMT Friday, regaining some ground after falling 6.7 percent on Thursday on talk in the market Ferrovial would walk away.
Sources close to the process told Reuters Ferrovial was putting the finishing touches to its proposal and planned to take it to BAA by the end of the week or next week.
However, a firm offer was unlikely to be tabled for several weeks as Ferrovial needs BAA to open its books so it can conduct a period of due diligence before submitting a firm offer.
PARTNERS
Ferrovial has already put its consortium partners together, including Singapore's government and the Canadian fund manager Caisse de depot et placement du Quebec, the sources said.
Royal Bank of Scotland and Citigroup, which is advising Ferrovial on the deal, are providing Ferrovial's financing, another source said, confirming newspaper reports.
Another source said the market was nervous because Ferrovial had been expected to make its move by now.
"I think what you saw yesterday was the marketing saying, 'what on earth is taking them so long?'," one source familiar with the situation told Reuters.
"It has been over four weeks now ... they are definitely taking their time. It may be on purpose or it may not be as easy for them as they thought."
But a person close to the matter said Ferrovial was taking its time because of the complex nature of the bid and the number of partners working together.
A Spanish website, www.elconfidencial.com, reported on Friday that Ferrovial had closed a financing deal which included RBS and Citigroup and that a BAA bid was "ever closer".
Ferrovial and BAA declined to comment on the report.
Australia's Macquarie Airports (MAP.AX: Quote, Profile, Research), a partner of Ferrovial on some projects and a rival on others, has also been reportedly eyeing BAA. Other sources close to the matter have said Macquarie would not join Ferrovial's consortium, and could bid on its own or in partnership with others, with Goldman Sachs's (GS.N: Quote, Profile, Research) infrastructure fund seen as one potential partner.
Britain's aviation regulator has warned potential bidders for BAA that they should plan for major upgrades to airport facilities and passenger growth when arranging their financing. (Additional reporting by Liz O'Leary in Madrid)
