BAA rejects 900 pence-a-share offer from Ferrovial

BAA rejects 900 pence-a-share offer from Ferrovial

	Published : Tue, 30 May 2006 12:40 By : James Rowe Print this Story

LONDON - Spanish construction group Ferrovial has increased the bid offer for airports operator BAA to £9.73 billion, but even this offer has been rejected.

Ferrovial said that the new 900p-a-share bid was very attractive. Previously the group had tendered in a 810p-a-share offer. "The increased ordinary offer provides BAA shareholders with an extremely attractive cash exit at a price which Ferrovial believes would not be sustained in the absence of a bid," the group said in a statement. The group also expressed "disappointment that BAA has chosen to reject such offers without further discussion." However BAA said that even the revised offer was too low.

"We have evaluated the Ferrovial Consortium's revised offer but the board is clear that it still falls well short of the true value of the company, which we explained to shareholders in our circular last week," said BAA chairman Marcus Agius. "The board is also clear that the revised offer does not reflect a suitable premium for control of BAA's unique assets." BAA said that the terms of the revised offer made it clear that shareholders would not receive the final dividend of 15.25p a share already announced in March.

Ferrovial also used the move by Office of Fair Trading last week to investigate the UK airports market as a reason that shareholders must go with it. "The OFT's statement is just one example of future uncertainty." It advises shareholders to take advantage of the "extremely attractive cash exit at a price which the offeror believes would not be sustained in the absence of a bid," it said in a statement.

But BAA says that the company's value is "clearly higher than 940p a share." Mr Agius said as much, "We remain determined that this company, with its unique assets, will not be sold to the Ferrovial Consortium or any other bidder on the cheap." The shares in BAA increased by 52 pence to 872½ pence in early trading.