Spanish firm cleared to bid for BAA

The European Union’s competition watchdog today approved a takeover bid for airports owner BAA by a consortium led by Spanish construction group Ferrovial.

The permission allows Ferrovial to go ahead with the unsolicited £8.75bn (€13bn) bid.

“After examining the operation, the European Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area or any substantial part of it,” the Commission said in a statement.

BAA has been fighting the approach from Ferrovial and yesterday pledged to return £750 million to shareholders on condition any bid collapses.

Last month, the company said that Ferrovial’s 810p a share takeover offer, which values BAA at £8.75bn (€13bn), “cannot be taken seriously”.

The construction company faces competition from Goldman Sachs for BAA, although a “friendly” approach from the US investment bank has also been rejected as too low by the BAA board.

Its highly conditional approach valued BAA at around £9.4 billion, but analysts believe a winning bidder would have to pay at least £9.75 billion.

The Spanish consortium also includes a Canadian fund manager and the private equity investment arm of the Singapore government.

Ferrovial sparked takeover speculation in February when it shocked the market by revealing its intention to mount an offer for the FTSE 100 Index company.

BAA has since pledged to spend £9.5bn (€14bn) over the coming decade on upgrading its airports and its defence will point to the growth potential of its assets, particularly Heathrow, Gatwick and Stansted.

It also owns Southampton, Aberdeen, Glasgow and Edinburgh airports and has interests in the United States, Australia, Italy and Hungary.

Ferrovial has said it would focus investment in the UK and enhance capacity, in particular, in south east England.