Spanish construction giant Ferrovial chasing acceptances for 90% in hostile bid for airports operator BAA

London
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Spanish infrastructure firm Ferrovial is seeking acceptances of its takeover offer for UK airport operator BAA from parties holding at least 90% of the UK airport operator’s shares, after opting to pursue a hostile bid for the company.

But one of the key BAA shareholders, Scottish Widows Investment Partnership, has already reiterated its rejection of the bid, stating that it “fully supports” the BAA board’s advice to turn down the Spanish offer. Ferrovial is heading a consortium, Airport Development and Investment, which is mounting a hostile takeover attempt after failing to secure BAA recommendation for a preliminary offer made last month.

The audacious offer, at £8.10 ($14.14) per share, is below the present BAA share price but Ferrovial’s opening shot will serve to buy the Spanish company time to consider its strategy. It had been facing a 24 April deadline to make a formal offer for BAA or withdraw.

BAA shareholders have previously indicated that they want a figure closer to £9 per share. Ferrovial has yet to indicate whether, in the event of shareholder rejection, it intends to improve its offer for BAA and, if so, to what extent. Ferrovial and its consortium partners would fund the cash acquisition through a combination of equity and debt.

Equity commitments would see the Spanish firm, through a division called Ferrovial Infra, holds a 64% share of the consortium while Canadian finance institution CDP would hold 26%. The Singapore government’s investment arm GIC SI would have the other 10%.

Other partners could also yet enter the consortium, says Ferrovial. Debt funding would be provided by finance companies Citigroup, Royal Bank of Scotland, Banco Santander, HSBC and Calyon.