Blair peer helps Aussie predator

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The Independent Online

Macquarie, the Australian bank bidding for the London Stock Exchange and expected to become involved in the bid battle for BAA, is being advised by Lord Macdonald of Tradeston.

The former transport minister and chancellor of the Duchy of Lancaster is described by the bank as a "senior adviser". Though he has no role in the day-to-day running of the bank, a well-placed source described him as being the "equivalent of a non-executive chairman".

Macquarie will decide this week whether it is going to increase its 580p a share offer for the LSE, whose shares soared to close at 824p on Friday after the exchange vowed to give £510m back to its investors (see comment, this page).

It is also expected to join its partner in Bristol airport, Ferrovial, in a bid for BAA, owner of Heathrow, Gatwick and Stansted airports. The Spanish construction company let slip earlier this month that it was interested in making an offer for BAA, though Macquarie has not said whether it will take part.

Macquarie also owns the M6 Toll road among a number of British investments, including Entergy Power Resources, the UK's largest biomass company.

Lord Macdonald, a former Communist shop steward who rose to become head of Scottish TV, was made a peer in 1997 after Labour came to power. Shortly afterwards, he was made a minister, first at the Scottish Office, then transport and finally in the Cabinet Office. He left government in 2003. He has been involved with Macquarie for nearly two years. His pay is not disclosed but it is thought that he receives in excess of £100,000 a year for his role.

If Macquarie does bid for BAA, Lord Macdonald's government connections will be useful to the Australian bank. However, it stated that the peer would have no direct role in any transactions.