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Published June 7, 2006 at 9:25 AM
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 British airports operator BAA plc lost Tuesday, June 6, to a $19 billion takeover by a group led by hostile bidder Spanish construction company Grupo Ferrovial SA that will likely trump a counter offer from a group led by self-styled white knight Goldman Sachs Infrastructure Fund.
Indeed, Goldman has walked away as Ferrovial has scooped up more BAA shares, ending the four-month bidding war for the parent of Britian's top layover destination, Heathrow airport.
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THE FLIGHT CREW
The Ferrovial team includes Canada's Caisse de dépôt et placement du Québec and Singapore's state-owned GIC Special Investments Pte. Ltd., among others, and put forth a 950.25 pence per share offer to be paid BAA investors, which values the company at £10.11 billion. Its process is as follows:
- Ferrovial opened the bidding floodgates on March 17 with an 810 pence per share offer, later increased to 900 pence per share.
- The group raised its original offer to £9.73 billion ($17.55 billion) May 29, and on June 2 began, along with its allies, buying up BAA shares to illustrate its intentions.
- The Ferrovial consortium said that if receives 90% shareholder approval it will initiate a squeeze-out to acquire the remaining shares.
The Goldman consortium, includes another international cast featuring Commonwealth Bank of Australia Ltd., which coughed up $750 million June 5 to join the bidding team that then was largely speculated to make a go for BAA, as well as Canadian pension funds Borealis Infrastructure Management Inc. and the Ontario Teachers' Pension Plan.
- The Goldman-led group originally offered 870 pence per share, or $17.6 billion for BAA, which was shot down, first in March, and then formally in April.
- On June 2, the U.K. takeover panel gave the consortium, led by a nonBritish entity, one week to raise its offer for the terminal group, while the Ferrovial clan busied itself buying up BAA shares.
AIRPORT DELAYS
The deal taxied on the acquisition runway while BAA fought encroaching predator Ferrovial.
- The Office of Fair trading chimed in May 25, saying it planned to investigate the U.K. airport market to ensure it promotes competition, rising the possibility it could call for a BAA dismantling.
- Days earlier, BAA had promised a special, $1.4 billion dividend to be paid to shareholders to boost its takeover defense. Ferrovial and Goldman signed on.
- The kicker: June 5, the Ferrovial consortium strengthened its position, buying up 150 million BAA shares at its offer price, to control just under 14% of the company.
FLYING COACH
- In late May, BAA valued itself at 940 pence per share, slightly less than the price it commanded.
- BAA will have to pay a break fee of £115.5 million if it agrees to a deal with Goldman Sachs or any competing party, or if the board withdraws its recommendation.
| Dealwatch executive summary |
The Date |
The Action |
| 6.07.06 |
Goldman walks away, clears path for Ferrovial-BAA union. |
| 6.06.06 |
BAA accepts $19 billion Ferrovial offer. |
| 6.05.06 |
Ferrovial buys up BAA shares and takes control of 14% of BAA. |
| 6.05.06 |
BAA reveals it is in takeover talks with Ferrovial and Goldman, but urges shareholders not to act. |
| 6.05.06 |
Commonwealth Bank of Australia Ltd. pays $750 million to join the Goldman team. |
| 6.02.06 |
Goldman gets a "put up or shut up" deadline from the U.K. takeover panel to raise its offer for BAA. |
| 5.29.06 |
Ferrovial sweetens its BAA bid to $18.24 billion. |
| 5.25.06 |
The Office of Fair Trade raises the issue of a possible BAA break up. |
| 5.23.06 |
The EC puts forth its initial, phase-one deadline to review the proposed merger. |
| 5.22.06 |
BAA promises a special dividend to shareholders to thwart a takeover. |
| 4.07.06 |
BAA formally shoots down Ferrovial's $15.5 billion offer. |
| 3.17.06 |
The first, but not the last, buyout offer led by Grupo Ferrovial SA is formally rejected by target BAA plc. |
Source: The Deal |
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