BREAKING NEWS is that Ferrovial, which leads the consortium aiming to
buy BAA, is backing an Office of Fair Trading initiative to examine
competition in the UK airports market. The Spanish giant also said it
would co-operate in any investigation if it bought BAA, a move
designed to ramp up its bid in the face of opposition from the UK
airport owner. BAA has previously resisted attempts to examine its
stranglehold on key areas of UK aviation, most notably London and
Scotland. BAA owns airports which handle 63% of passengers in the UK.
This rises dramatically in the London area, where it has 92% of the
market, and Scotland, where it has 86%. If the OFT review goes
against BAA, there could be a referral to the European Union
Competition Commission. BAA is trying to fight off Ferrovial with a
”750m cashback for investors if a takeover bid by Spain's Ferrovial
fails. Shareholders are set to receive a letter setting out the
handout ” which may well have been previously set aside for investment
in the group”s seven UK airports ” and how BAA will combat any renewed
bid by the consortium. The company has until today (29 May) to unveil
its official defence against Ferrovial's bid, while any takeover has
been cleared by the European Commission. It claims it is worth ”10bn,
compared with the consortium”s ”8.75bn bid. As well as the offer from
the Spanish construction firm, the company has also rejected an
approach from a consortium led by US bank Goldman Sachs.
http://www.oft.gov.uk
http://www.baa.com