Macquarie joins Ferrovial consortium in bid for BAA

Dermot Davitt

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The Australian bank's subsidiary Macquarie Airports has the option to acquire Ferrovial's stakes in Sydney and Bristol airports if the BAA bid is successful

Australian bank Macquarie has joined the Grupo Ferrovial-led bid to buy UK airports group BAA, Ferrovial said today (March 29). The consortium comprising Ferrovial, Caisse de dépôt et placement du Québec and an investment company managed by GIC Special Investments has appointed Macquarie Bank as financial co-adviser alongside Citigroup Global Markets in its efforts to acquire BAA.

Ferrovial has also reached an agreement with Macquarie Airports on Ferrovial's holdings in Sydney and Bristol airports. If BAA is acquired, Macquarie will have the option to buy 20.9% of the capital of Sydney airport for about A$1bn (€600m) and 50% of Bristol airport for £106m (€154m). The price of both "call options" is based on the valuation of the assets by Macquarie in December 2005.

In addition, Ferrovial would have the option to sell these stakes to Macquarie at a 7.5% discount to Macquarie's valuation.

Macquarie Bank provides investment banking and financial services and employs over 7,600 people in 24 countries. Grupo Ferrovial and Macquarie Bank have collaborated in a number of projects in the last six years, including the IPO of Cintra, in which Macquarie divested its entire 40% stake, the acquisition of Chicago Skyway Tollway in Chicago, and the appointment as preferred bidder of the consortium comprising Cintra and Macquarie for the acquisition of the Indiana Toll Road in Indiana, US.

BAA rejected a bid from the Ferrovial-led consortium earlier this month, but the move to involve Macquarie suggests a further, higher bid will emerge. It also removes Macquarie as a possible rival bidder for BAA. The UK regulator has given Ferrovial until April 24 to make a final bid for BAA.