BAA recovers as Spanish press on

Shares in the airport operator BAA surged back above the price being offered by Ferrovial yesterday after the Spanish construction giant made it clear that it intends to press ahead with its offer despite the threat of a monopolies investigation into the UK airport market.

The Ferrovial consortium, which also features the Canadian pension fund CDP and the private equity arm of the Singapore government, said it was familiar with the UK regulatory framework and would co-operate fully with any review that the Office of Fair Trading might launch.

Souces in Ferrovial dismissed rumours that its two partners were unhappy with the OFT announcement and were considering pulling out. "No one is fazed by this. It is full steam ahead," said one source.

BAA shares put on 4 per cent to close 33p higher at 820.5p, recouping most of the ground lost on Thursday when the OFT shocked the market by disclosing that it was considering a possible referral of the airport sector to the Competition Commission.

Ferrovial has bid 810p for BAA, valuing it at £8.8bn. It has until a week on Monday to raise its offer although most observers expect it to move some time in the middle of next week.

BAA's defence document, earlier this week, claimed that the company was worth more than 940p a share. The company also said it intended to raise the dividend this year by 40 per cent, in addition to returning £750m to shareholders.

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