BAA plc

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BAA plc is the owner and operator of seven major United Kingdom airports and operator of several airports worldwide, making the company one of the largest transport companies in the world. It is traded on the London Stock Exchange and is a constituent of the FTSE 100 Index. At June 2005 its market capitalisation was approximately 6.6 billion pounds.

BAA makes its money from charging landing fees to airlines and also increasingly from the wide range of shops in airport terminals. BAA does not operate all UK airports; many are in the ownership of local authorities.

Contents

1 History

1.1 Ferrovial takeover

2 Name
3 BAA Interests

3.1 Owned by BAA
3.2 Operated by BAA
3.3 Retail management

4 External link

History

The British Airports Authority was established by the passing of the Airport Authority Act 1966, to take responsibility for four state-owned airports - London Heathrow Airport, London Gatwick Airport, Stansted Airport and Prestwick International Airport. In the next few years, the authority acquired responsibility for Glasgow International Airport and Edinburgh Airport.

As part of Margaret Thatcher's moves to privatise government owned assets, the Airports Act (1986) was passed which mandated the creation of BAA plc as a vehicle by which stock market funds could be raised; the initial capitalisation of BAA plc was £1,225 million. In the early 1990's, the company sold off Prestwick. More recently it has expanded into international operations, including retail contracts at Boston Logan International Airport and Baltimore-Washington International Thurgood Marshall Airport (through subsidiary BAA USA, Inc.), and a total management contract with the City of Indianapolis to run entirely the Indianapolis International Airport (as BAA Indianapolis, Inc.).

In December 2005, BAA made a winning bid of £1.2 billion for a 75% stake in Ferihegy, the largest airport in Hungary, which was being privatised by the Hungarian government. [link]

Ferrovial takeover

In February 2006, BAA rejected a $15.4 billion preliminary takeover bid from a consortium led by Grupo Ferrovial, a Spanish firm that specializes in infrastructure and which has been working on an offer since February. The bid shot up the shareprice to over £8. The British Regulators gave Ferrovial until 24 April 2006 to make a new bid. Ferrovial Consortium reiterated its 810p offer, duely rejected making it a hostile bid. Following the European Commission approving the bid (in line with anti-trust regulation), on 25 May 2006 the Office of Fair Trading announced it was examining the UK airport market - just after the publishing of the second defense document of BAA claiming shares are worth over 940p - hitting the shares by 45p, nearly 6%, in one day of trading.

On 5 June 2006 a 950¼p per share (935p share price and 15.25p dividend) bid by Ferrovial was accepted over a bid by Goldman Sachs of 955¼p, based on the choice to keep a small amount of equity in the new company, quoted on the LSE AIM market. Goldman Sachs has up to 16 June to counter-offer, while shareholders have up to 26 June to accept the sale. A penalty clause of $115.5 million in favor of Ferrovial is in place had a rival bidder to achieve a 50% stake in the company. As of 6 June, the Ferrovial Consortium had bought a 14% stake in BAA. [link][link]

The takeover may be deemed finalised as the consortium led by Goldman Sachs announced that it will not proceed with an offer for BAA, after Citigroup had bought enough shares on the market to reach a 28.4% share for the Ferrovial Consortium. [link] [link]

Name

Although the company is adamant that its name is strictly "BAA plc" and that the letters do not officially stand for anything, it is still widely (albeit erroneously) referred to as the "British Airports Authority" by both the media and the public - even though the Authority officially ceased to exist following the 1986 privatisation.

BAA Interests

Owned by BAA

Operated by BAA

Retail management

External link

[Official site]

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