BAA Rejects $15B Ferrovial Bid

British airport operator BAA PLC said Friday it has received and rejected a proposed 8.75 billion pound ($15.35 billion) takeover from the Spanish infrastructure company Grupo Ferrovial SA.

BAA, which operates seven airports across Britain, including Heathrow, Gatwick and Stansted in London, said that the 810 pence ($14.20) per share proposal contained conditions and did not reflect the true value of its assets.

"On the basis of this proposal, the board does not believe it is in shareholders' interests for it to enter into discussions with Ferrovial," BAA said in a statement to the London Stock Exchange.

Ferrovial said the proposal offered attractive value for BAA shareholders and it was "disappointed that BAA has chosen to reject the proposal without further discussion."

Ferrovial, which made the approach as part of a consortium including Caisse de depot et placement du Quebec and an investment company directed by GIC Special Investments Pte. Ltd., said its "strong preference" was to receive a recommendation from BAA, rather than move to a hostile bid.

"Therefore, the consortium would be willing to increase its offer by a small increment in return for BAA agreeing to grant the limited due diligence access ... and recommending the consortium's offer," it said.

The offer is a 25 percent premium over BAA's share price before Ferrovial said on Feb. 8 that it was considering a bid.

BAA's shares fell 2 percent to 822 pence ($14.42) after Friday's announcement.

Analysts said BAA's rejection was unsurprising given reports that others, including Australia's Macquarie Bank Ltd., are also interested in the airport operator.

Ferrovial, which owns construction company Amey, said that the consortium was "committed to the long-term ownership and continued development of BAA's business."

It said the group would focus on investment in Britain and enhancing airport capacity in southeast England. BAA is already building a fifth terminal with British Airways PLC at Heathrow Airport to cope with extra demand.

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