BAA Rejects Improved Offer Made by Spain´s Ferrovial

Spanish construction firm Grupo Ferrovial raised its bid for UK airports operator BAA to £9.73 billion ($18.26 billion) on Tuesday, but BAA said it was still too low.

Ferrovial, which raised its offer to 900 pence a share in cash for the owner of Heathrow, Gatwick and Stansted airports from the previous proposal of 810 pence, said BAA´s claim last week to be worth more than 940 pence a share was “not credible”.

It said the new bid, which also comes with offers for BAA´s convertible bonds, was 41 percent above BAA´s average share price for the 30 days ended February 6, the day before speculation emerged about a possible offer for the group.

BAA said last week it believed it was worth more than £10 billion ($18.77 billion) and sought to keep shareholder support by offering a 40 percent increase in dividends and a £750 million ($1.41 billion) share buyback.

Ferrovial said BAA´s own valuation failed to reflect a number of factors including uncertainty over its growth prospects in the highly regulated UK market and failures to cut costs and meet its own UK passenger growth forecasts.