Re: MAP - Macquarie Airports
Goldman bids $25.9b for UK airport group
June 6, 2006 - 9:04AM
A consortium led by US investment bank Goldman Sachs Group Inc has offered to pay 10.3 billion pounds ($A25.9 billion) for UK airports group BAA Plc.
This trumps a previous offer from Spain's Grupo Ferrovial SA, a source familiar with the situation said.
The group is offering 940 pence per BAA share. BAA investors would also get a final dividend of 15.25 pence per share, giving the offer a total value of 955.25 pence a share, the source said.
The consortium includes US insurer AIG, Canadian investment fund Borealis, Commonwealth Bank of Australia's Colonial First State, Abu Dhabi-based investment company Mubadala and Ontario Teachers Pension Fund, the source said.
It was still awaiting a response from BAA.
Financing for the bid would be provided by banks, including Credit Suisse, Dresdner Kleinwort Wasserstein, Lloyds TSB and West LB.
A BAA spokesman declined to comment.
BAA said earlier on Monday it was in talks with Ferrovial and a second party.
The shares of the UK-based airports operator had jumped 2.7 per cent to 929-1/2 pence by 1519 GMT (0019 AEST), well above Ferrovial's current 900p a share offer. BAA has said it is worth at least 940p a share.
Ferrovial was earlier working towards a 2300 GMT (midnight UK time) deadline on Monday to lodge its final bid for BAA. Sources familiar with matter said it was considering raising its offer if it could secure the backing of BAA's board.
Ferrovial was not immediately available for comment.
Goldman Sachs, which made an informal approach to BAA earlier this year, had been widely expected to make an approach. Commonwealth Bank of Australia said earlier on Monday that it had joined a consortium led by the US bank.
"There is interest coming in from Goldman Sachs, who are well funded and appear to be very serious in terms of their intent," Euan Stirling, investment director at Standard Life Investments, earlier told BBC Radio. Standard Life owns about one per cent of BAA.
Last week, Ferrovial's hostile offer of 900 pence a share was rejected by BAA, which owns London's Heathrow, Gatwick and Stansted airports.
Airports are drawing investors attracted by a highly visible, long-term outlook, with traffic in Europe expected to double by 2020 to two billion passengers.
Higher traffic will boost revenues from landing fees and airport businesses such as leases for shops and restaurants.
Opportunities to buy major European airports are also few.
CBA, Australia's second-biggest bank by assets, said its Colonial First State Global Asset Management unit would have an equity interest of more than $1 billion in the Goldman consortium if it went ahead with an offer and was successful.
Last week, bankers acting for Ferrovial launched a failed raid on BAA shares in the market in a bid to fend off the Goldman consortium.
BAA, which also owns Glasgow and Edinburgh airports and has interests in several Australian airports, has sought to keep shareholder support by boosting its dividend and offering to buy back shares.