Spanish win BAA with £10.3bn bid - Business News - Business - The Independent

Spanish win BAA with £10.3bn bid

The Spanish construction giant Ferrovial was poised last night to win the takeover battle for the airports operator BAA with a bid worth £10.3bn.

After a dramatic late night auction involving Ferrovial and a rival bid headed by Goldman Sachs the Spanish-led consortium was set to emerge victorious for the owner of Heathrow, Gatwick and Stansted airports with an offer worth 950p.

It is understood that Goldman's offered 955p but that its bid was felt to be too hedged in with conditions. Sources close to the investment bank disputed that, saying the offer was "fully-financed".

Barring a last minute change of heart it appears as if the BAA board, led by the chief executive Mike Clasper and chairman Marcus Agius will recommend the Ferrovial-led bid today. The other two partners in the consortium are CDP, the Canadian pension fund investment group, and GIC, the private equity arm of the Singapore government.

Goldman's was supported in its bid by Canada's Borealis Infrastructure Management, part of the Ontario Muncipal Employees Retirement Fund, the US insurer American International Group Commonwealth Bank of Australia which was prepared to commit $A1bn (£435m) of funding towards the bid.

Yesterday's tumultuous auction started at 9 am and was still going strong more than 12 hours later. It began when Ferrovial's advisers, Citigroup, approached BAA asking for negotiations on a recommended offer, knowing that they only hand until midnight last night to improve their 900p-a-share bid.

A short time afterwards, Goldman's entered the fray. It is thought that Ferrovial raised its bid at least three times before finally establishing itself as the favourite to win the auction.

Sources close to the Goldman's camp said they were puzzled by BAA's apparent decision to go with the Ferrovial offer, claiming there were no conditions attached to its offer.

However, it is understood that there were a number of aspects to the Goldman's bid which taken together were enough to sway the BAA in board in favour of the Spanish offer.

The Ferrovial bid of 950p is understood to include the 15p dividend which BAA has already declared, effectively making it worth 935p for BAA shareholders.

In its final defence document a fortnight ago the company said it was worth at least 940p a share, not including a premium for control of the company.

A takeover of BAA by Ferrovial will hand control of seven UK airports to a foreign company. London Luton airport is already owned by another Spanish group Abertis.

Ferrovial is expected to sell off most of BAA's overseas interests to help finance its takeover, which will result in BAA being saddled with more than £12bn of debt.

BAA accounts for 63 per cent of all airline passengers flying into and out of the UK but in the London area it has a virtual monopoly, controlling 92 per cent of the market. The Office of Fair Trading is considering launching an investigation into BAA's monopoly which could result in it being referred to the Competition Commission and ultimately broken up.

There had been fears that the OFT's intervention would deter the two rival bidders but neither has been fazed by the prospect of a competition inquiry.

BAA has already been under siege for four months and ministers will be relieved to see an end to the uncertainty over the company and the distraction for its management, given the strategic nature of BAA's assets. Its investment programme for the next 10 years envisages spending of £9.5bn and includes a second runway at Stansted and a £1.5bn redevelopment of the central terminal area at Heathrow.

News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Sport
FootballFull debuts don't come much more stylish than those on show here
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
PROMOTED VIDEO
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Travel
travel
News
The ecological reconstruction of Ikrandraco avatar is shown in this illustration courtesy of Chuang Zhao. Scientists on September 11, 2014 announced the discovery of fossils in China of a type of flying reptile called a pterosaur that lived 120 millions years ago and so closely resembled those creatures from the 2009 film, Avatar that they named it after them.
SCIENCE
Life and Style
tech
Sport
David Moyes and Rio Ferdinand
FootballRio Ferdinand on why the former manager failed at United
Arts and Entertainment
Matisse: The Cut-Outs exhibition attracted 562,000 visitors to the Tate Modern from April to September
art
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Models walk the runway at the Tom Ford show during London Fashion Week Spring Summer 2015
fashionLondon Fashion Week 2014
News
Kenny G
news
News
peopleThe black actress has claimed police mistook her for a prostitute when she kissed her white husband
News
i100
Life and Style
techIndian model comes with cricket scores baked in
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Training Coordinator / Resource Planner - City, London

£35000 - £38000 per annum + Benefits: Ashdown Group: Training Coordinator / Pl...

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£400 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week