BAA bid defence costs £2m a week

BAA, the airports operator facing a hostile bid from Spain's Ferrovial, is spending £2m a week defending itself against the unwelcome offer, it emerged yesterday.

The company disclosed that between 8 February, when Ferrovial first made public its interest in bidding, and 31 March, a total of £15m was spent on advice from investment banks, lawyers, accountants and public relations firms.

BAA said that the total cost of defending the bid was still uncertain but would be "significantly greater" than the £15m spent up to the beginning of April - a period which does not include either the actual launch of the Ferrovial bid or the issuing of BAA's first formal defence document.

Mike Clasper, BAA's chief executive, admitted it was a "disgustingly high number" but added: "We are very conscious of what this is costing and have been aggressive in negotiating the right terms, however, this is an expensive process. It is a lot of money but that is the going rate."

BAA's defence team, led by the investment banks UBS and Rothschilds are on an incentive fee arrangement which varies according to whether they repel Ferrovial or succeed in making it pay a substantially higher price than the £8.8bn so far offered.

Mr Clasper reiterated that the 810p-a-share bid "significantly undervalued" BAA but would not be drawn on how much he thought the company was worth. BAA has already rejected an informal approach worth 870p-a-share from a consortium led by Goldman Sachs.

BAA has until the bank holiday on 29 May to come up with its final defence against Ferrovial. It is expected to offer to return cash to shareholders but the amount will be limited by the need to retain a strong balance sheet to fund BAA's £9.5bn investment programme.

Mr Clasper was speaking as BAA announced an 8 per cent rise underlying profits to £710m last year despite passenger numbers at its seven UK airports only increasing by 2 per cent. Revenues rose by 7 per cent to £2.23bn but costs rose by a similar amount, after sharp increases in energy and rates bills, policing charges and staff wages.

BAA's results were complicated by the sale of part of its property portfolio, the £1.35bn acquisition of Budapest airport in December and adjustments to the valuation of derivatives. At the pre-tax level, profits fell 17 per cent to £757m.

But Mr Clasper said the underlying performance showed a strong improvement. Net retail income, which excludes cost of sales at BAA's duty free outlets, rose 5 per cent to £616m while landing charges increased 9.6 per cent to £898m. Within this figure, there were increases of 11 per cent, 16 per cent and 6.3 per cent respectively at Heathrow, Stansted and Gatwick, BAA's three regulated airports in the South-east.

Arts and Entertainment
Rita Ora will replace Kylie Minogue as a judge on The Voice 2015
Life and Style
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
Life and Style
Arts and Entertainment
Tennis player Andy Murray's mum Judy has been paired with Anton du Beke for Strictly Come Dancing. 'I'm absolutely delighted,' she said.
tvJudy Murray 'struggling' to let Anton Du Beke take control on Strictly
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits