Spain's Grupo Ferrovial SA said Wednesday it would consider a small increase to its 8.75 billion pound ($15.6 billion) takeover offer for BAA PLC, after the British airports operator urged shareholders to reject the offer.
BAA said in its official defense document that "It's not the right time, it's not the right price."
Ferrovial replied almost immediately, reiterating that it was prepared to consider a "small increase" to its 8.10 pound ($14.89) per share offer if BAA opened its books for due diligence and recommended a revised bid.
However, BAA Chief Executive Mike Clasper said the offer would need to be a lot higher before the British company considered opening its books.
"They've talked about small increments," he said. "The value of this company is way, way north of 810 (pence)."
Shares in BAA fell 0.5 percent to 8.47 pounds ($15.62) - still well above the offer price - in trading on the London Stock Exchange.
BAA, which operates seven airports around Britain including London's Heathrow, Stansted and Gatwick Airports, said in its defense document that "Ferrovial's offer does not take account of the value BAA generates from its London airports, its non-London airports and the exceptional opportunity that lies ahead."
BAA said that shareholders will benefit from its 9.5 billion pound ($17.5 billion) capital investment program at its three London airports over the next 10 years.
The company said that shareholders would see good returns from rising passenger traffic at its U.K. and overseas airports.
BAA said in March it was also looking at investing in secondary airports in China, following last year's 1.3 billion pound acquisition of Budapest Airport.
Clasper said Wednesday that BAA had no need to consider more significant actions to bolster shareholder support, such as a share buyback or special dividends, while the offer price remained at 810 pence per share.
Clasper said that BAA has had no further contact with Goldman Sachs, the bank acting on behalf of Ferrovial and its fellow consortium members Canadian investment fund Caisse de Depot et Placement du Quebec and Singapore government fund GIC, since the original approach on April 16.
Ferrovial, which owns construction company Amey, has invested heavily over the last few years to diversify out of its core Spanish construction business.
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Looking forward, BAA is forecasting a 3.5 percent rise in passenger numbers.
BAA operates seven airports across Britain, including Heathrow, Gatwick and Stansted in London. Their shares fell 2 percent to 822 pence ($14.42) after Friday's announcement.
BAA said it expects passenger numbers at its seven airports in Britain to increase by 2 percent in the year ending March 31.
BAA currently owns and operates airports that handle 63 percent of travelers to and from Britain.