Spanish construction-to-airports giant Ferrovial has finally made its move with an ?8.8bn ($15.4bn) offer for UK airports' operator BAA and indicated that it may improve it if it is not sufficent.

But after a meeting of the Board this morning BAA has countered by rejecting the proposal, which it says ‘does not begin to reflect the true value of BAA's unique portfolio of airport assets. On the basis of this proposal, the Board does not believe it is in shareholders? interests for it to enter into discussions with Ferrovial.’
Marcus Agius, Chairman of BAA, commented further: ‘Since Ferrovial made its first announcement about BAA five weeks ago, attention has focused upon the value of our assets and the quality of our management. We believe that a period of exceptional opportunity lies ahead. Delivering enhanced value to our shareholders remains this company?s first priority.’
Ferrovial made its offer conditional on due diligence and a recommendation from the BAA Board and now it has its answer, although this may be only a sounding shot across the BAA bow as the Spanish company tries to find its range. It will be well aware that some of BAA?s biggest shareholders have indicated that they would not back any bid for the company that offers less than 900 pence a share, effectively valuing BAA at ?9.5bn ($16.5bn).
In a statement from Ferrovial after BAA rejected its offer, the Spanish company said: ‘The consortium believes the proposal offers attractive value for BAA shareholders and hence is disappointed that BAA has chosen to reject the proposal without further discussion.’
Ferrovial's offer for BAA was made as a consortium bid alongside Canadian pension-fund manager Caisse de depot et placement du Quebec and GIC Special Investments Pte Ltd., a Singapore-based investment company. The next move in what may well turn out to be a long running episode will clearly have to come from Ferrovial.