Grupo Ferrovial Makes Another Bid for BAA

LONDON_A consortium led by Spain's Grupo Ferrovial SA launched a takeover bid for BAA PLC Friday at the same price of about $15 billion that the British airports operator has already rejected.

The consortium, made up of Ferrovial, Canadian investment fund Caisse de Depot et Placement du Quebec and Singapore government fund GIC, said it will seek a recommendation from BAA for the 810 pence ($14.17) a share offer. That is worth 8.75 billion pounds ($15.3 billion).

However, the consortium acknowledged that BAA, the operator of London's Heathrow, Gatwick and Stansted airports, is unlikely to oblige at that price given it dismissed an identical offer on March 17 as undervaluing the group's assets.

Ferrovial admitted that its hand had been "reluctantly" forced by the U.K. Takeover Panel, which had said the consortium must make its intentions clear by April 24.

"Whilst this bid is being made unilaterally, we do not regard it as hostile," Ferrovial Chairman Rafael del Pino said in a statement. "We remain keen to engage in a dialogue with the BAA board with a view to securing a recommendation for the consortium's offers."

Analysts said the comments were a hint that Ferrovial was open to increasing the bid. At the time of the original bid, the Spanish construction company said it may be prepared to raise its offer by small increments.

Stephen Furlong at Davy Stockbrokers said the fact that it was not lifting the offer immediately indicated the takeover dance could be long and drawn out.

BAA shares closed above the bid price Friday, up 1.5 percent at 847 pence ($14.75).

Last week, the consortium said it had appointed Australia's Macquarie Bank Ltd. as an adviser.

Macquarie had been widely perceived as a potential rival bidder for BAA, and analysts said its decision to advise Ferrovial significantly reduced the likelihood of a bidding war.

The Australian bank, which recently gave up on a bid for the London Stock Exchange, has significant airport operations through its private equity investment fund Macquarie Airports.

Ferrovial said Friday that it had made "significant progress on various aspects of the transaction" since the first offer was rejected.

"However, it is clear that, for various reasons, the consortium is unlikely to be able to secure a recommendation" before the Takeover Panel's deadline.

Ferrovial said it planned to keep all seven of BAA's British airports and to work with the government and the Civil Aviation Authority to deliver industry plans on runway and terminal development.

The airspace regulator warned earlier this year that any potential bidder should take into account the expected infrastructure spending required to meet the expected rise in passenger traffic across Britain.

The Civil Aviation Authority, which is carrying out a review of caps on airport charges at BAA's three London airports, indicated it was not prepared to raise the caps so that any bidder could generate enough cash to pay back loans taken out during a takeover.

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