White knight rides to BAA side
By Mark Kleinman. Dominic O, The Sunday Times | Apr. 17, 2006
BAA, the British airports operator fighting off a hostile takeover bid led by the Spanish construction company Ferrovial, has received a "white knight" approach from investment bank Goldman Sachs.
Macquarie Bank is advising Ferrovial in its move on the operator of Britain's biggest airports, including Gatwick, Heathrow and Stansted.
The board of BAA was contacted by a team from Goldman last week to register its interest in assembling a "friendly" bid for the company.
A recommended deal would be expected to value BAA at close to pound stg. 10 billion ($24.07 billion).
Goldman's team is understood to be led by Bill Young, head of the bank's new infrastructure investment fund.
Mr Young has held talks with potential partners, including the Canadian pension funds Borealis and Ontario Teachers. It is understood that firm commitments of support are unlikely to emerge until the BAA board indicates its willingness to engage in the approach.
"The approach has been made, but quite where this goes from here I am not sure," a source said. "But it shows that Goldman has a serious interest in BAA."
BAA and Goldman Sachs declined to comment.
Earlier this month, BAA, headed by chief executive Mike Clasper and chairman Marcus Agius, rejected an 810p-a-share hostile offer from the Ferrovial consortium for the second time.
The offer was pitched at the same price as an earlier informal approach, which was also rebuffed by the BAA board.
Ferrovial will kick off the formal timetable under Takeover Panel rules when it posts its offer document to BAA shareholders in the next three weeks.
The Spanish group is understood to be prepared to raise its offer, although many investors are holding out for at least 900p a share, a price that would value the entire company at pound stg. 9.75 billion.
Ferrovial may also look to increase the firepower in its bid team. It has two partners in its consortium: CDP, a Canadian pension fund investment group, and GIC, the private equity investment arm of the Government of Singapore. But the offer document revealed that Ferrovial would be prepared to sell part of its stake to a new partner. It could sell up to 10 per cent.