BAA rejects third Ferrovial offer

Emily Pacey

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BAA has rejected the latest takeover bid from Grupo Ferrovial, but the Spanish consortium may be heading into talks with the UK's Civil Aviation Authority regarding BAA's debt burden

UK airports group BAA has published a document recommending that shareholders reject Grupo Ferrovial's latest hostile takeover bid. The Ferrovial Consortium's Offer Document reiterates for the third time BAA's advice to shareholders to dismiss the offer. In a press statement BAA said the bid was "made at a price that bears no relation to the true value of the company".

The consortium, led by Spain's Grupo Ferrovial, offered BAA a cash bid of 810 pence per share, the same amount as its original bid.

BAA chairman Marcus Agius said: "The Ferrovial consortium's offer cannot be taken seriously. It is no more than a tactical manoeuvre and our shareholders should have nothing to do with it."

BAA will be writing to shareholders in the next 14 days to explain its reasons for recommending rejection of the Ferrovial bid. In the meantime the group is urging its shareholders to take no action in respect of the offer.

Meanwhile, reports suggest that Ferrovial is seeking to allay concerns that its bid for BAA will burden the operator with further debt. RavenFox.com understands that Ferrovial is holding talks with the UK's Civil Aviation Authority and government officials about its ability to meet BAA's capital spending programme, despite taking on debts of £14bn ($24.5bn) if the deal is successful.

The development follows reports at the weekend that MPs have called for an inquiry into Ferrovial's £8.75bn ($15bn) bid.