BAA rejects bid from Goldman Sachs-led consortium |
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Mon, 17 Apr 2006 09:40
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LONDON: U.K. airports operator BAA Plc. has rejected a 9.4-billion-pound takeover offer from a group headed by U.S. investment bank Goldman Sachs, saying the offer is too low for it to consider.
The company, the world's largest airports operator and running seven airports in Britain, including London's Heathrow, Gatwick and Stansted, is facing another hostile bid made by a consortium led by Spanish infrastructure firm Ferrovial for 8.75 billion pounds.
BAA confirmed in a statement Sunday that it did receive a preliminary highly conditional and confidential approach on 30 March from a consortium including Goldman Sachs "... to make a cash offer at a price of 870 pence per share." It said the proposal, which included an option to take shares in the bid vehicle, was rejected by its board as it clearly failed to reflect the true value of the company.
BAA had rejected the Ferrovial offer but it is likely that the Spanish firm will raise the offer after further talks with shareholders. Ferrovial has got the support of Caisse de Depot et Placement du Quebec and Singapore's GIC Special Investments in the bid and it is being advised by Australia's Macquarie Bank under an agreement to sell its stakes in Sydney and Bristol airports if the bid goes through.
Some analysts described the Goldman Sachs' offer as that of a white knight to help the firm ward of the potentially hostile attempt from the Ferrovial-led consortium. It is believed that Ferrovial will post its offer document to BAA shareholders in the next three weeks with possibly an increased offer of up to 900 pence a share, which would value the company around 9.75 billion pounds.
Britain’s aviation regulator, the Civil Aviation Authority, has said any firm wanting to buy BAA should provide for major upgrades to airport facilities. BAA is expected to spend 2.2 billion pounds on a second runway at Stansted and has earmarked 1.5 billion pounds for a fifth terminal at Heathrow.
BAA shares closed at 841.5 pence Thursday, the last day of trade before the Easter holidays, valuing the company at 9.1 billion pounds.
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