A consortium led by Goldman Sachs is poised to raise its offer for the airports group BAA, to follow a possible higher bid today from Spain's Ferrovial.
The US investment house has until Friday to make its move, while Ferrovial's last chance to sweeten its £9.7bn bid for BAA comes today. This enables Goldman to see how much Ferrovial, a construction group, can afford before making its pitch.
One City source suggested that the Spaniards would improve their bid by 15p a share to 915p. The BAA board, chaired by Marcus Agius, has rejected the 900p price as an attempt to buy the company "on the cheap", claiming it is worth more than 940p.
Goldman, which has sought to portray itself as a "white knight" in this long-running bid saga, previously made an 870p-a-share approach to BAA that was rejected in April. But it has yet to table a formal offer and, once it does so, the Ferrovial bid timetable would restart, enabling it too to come back with more money.
The US bank will go ahead with a board recommendation only while Ferrovial is willing to go hostile. A number of leading shareholders are thought to be ready to accept a bid of 950p, which would value BAA at £10.3bn.
A spokesman for Goldman said: "We are actively looking at our options."
Ferrovial again on Friday unsuccessfully attempted to open negotiations with the owner of London's Heathrow, Stansted and Gatwick airports. A BAA board meeting held on Friday evening was officially called to discuss an attempted raid on its shares, though it is likely to have discussed the bid situation more generally.
Ferrovial waded into the stock market on Friday morning in an unsuccessful attempt to buy a blocking stake of at least 10 per cent in BAA, in order to deter the rival interest from Goldman. But by the close of trading on Friday, only 60 million BAA shares had changed hands, representing less than 6 per cent of the company, leaving Citigroup, Ferrovial's broker, empty-handed. A number of BAA's leading institutional shareholders - thought to include Schroders, M&G and Threadneedle - had refused to sell.
Citigroup had offered to buy 150 million BAA shares - equivalent to a little less than 14 per cent of the company - at 900p. In the end, Citigroup is said to have been offered only 30 million shares and chose not to buy any at all.
One reason why shareholders are holding out for more is the possible extra value that would be unleashed from any break-up of BAA in the future. The airports group has suggested this would go to Ferrovial if the company is sold now.
That issue has been brought to the surface by the recently announced investigation by the Office of Fair Trading about whether to refer BAA to the Competition Commission - a move which could result in the break-up of its monopoly over the three London airports.