Ferrovial reveals thinking behind hostile BAA bid

Dermot Davitt

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The consortium will focus on developing airport capacity in the UK's southeast if it takes control of BAA

Spanish construction and transport group Grupo Ferrovial today outlined its reasons for the proposed acquisition of UK airports group BAA. As reported earlier today on RavenFox.com, Airport Development and Investment, the consortium led by Ferrovial that aims to acquire BAA, has launched a hostile bid for the UK airports group.

Justifying its move, Ferrovial said: "The proposed acquisition of BAA is entirely consistent with Ferrovial's strategy in recent years to increase its focus on long-term and international investment in infrastructure and transport services businesses, including airports and toll roads. Airports are complex and dynamic businesses with many stakeholders. The consortium believes that BAA's existing management will continue to face significant challenges given the particular features of the BAA group and the environment in which it operates, including BAA's key assets being subject to economic regulation and price control; BAA having a significant investment programme to deliver airport capacity, particularly in the South East of England; and the diversity of the BAA group, which has businesses in multiple and distinct jurisdictions."

Ferrovial said that it was forced to make a unilateral approach for BAA because it was unlikely to reach agreement with the BAA board on a recommended offer by the bid deadline of April 24.

On its plans for BAA's business, the consortium said: "The consortium's aim is to maximise BAA's operational and financial efficiency, while also focusing on security, safety, good airline and passenger service and environmental issues. The consortium is committed to the long-term ownership and continued development of BAA's business, and to the investment needs of the business in the future. Key to this is its intention to keep together BAA's UK airports and to work co-operatively with the UK government and the Civil Aviation Authority to deliver the white paper recommendations for runway and terminal development.

"The consortium has had regard to all BAA's disclosed investment projects across its seven UK airports. [It] intends to focus on investment in the UK and to enhance airport capacity, in particular, in southeast England. The consortium has substantial experience in investing in and managing infrastructure assets, including airports."

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