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. Last Updated: 07/27/2016

BAA Repudiates Takeover Bid From Goldman Sachs

LONDON -- British airports operator BAA, fending off a takeover bid from Spain's Ferrovial, has rejected a ?9.4 billion ($16.5 billion) approach from a group involving Goldman Sachs, saying it was too low.

The hostile bid earlier this month by a consortium led by Spanish construction company Ferrovial is for ?8.75 billion, or 810 pence per share in cash.

"BAA confirms that it did receive a preliminary highly conditional and confidential approach on March 30 from a consortium including Goldman Sachs ... to make a cash offer at a price of 870 pence per share," BAA said in a statement Sunday.

BAA said the proposal by the U.S. investment bank -- which included an option to take shares in the bid vehicle -- was rejected by the board because "it clearly fails to reflect the true value of the company."

BAA said that since March 30 it had received no further approaches from the group.

The airports operator also said it issued the statement on Sunday without the consortium's agreement and that there could be no certainty an offer would be made.

BAA shares closed at 836 pence on Thursday, valuing the business at more than ?9 billion.

BAA, which runs London's Heathrow, Gatwick and Stansted airports, rejected the offer from Ferrovial's bidding consortium on April 7. That bid was pitched at the same level as a non-binding proposal turned down by BAA in March.

Although BAA has rejected Ferrovial's offer, analysts say the firm is likely to raise its bid after further talks with shareholders over the next few months.

Ferrovial, which could not be reached for comment on Sunday, is bidding with Caisse de Depot et Placement du Quebec and Singapore's GIC Special Investments. It is being advised by Australia's Macquarie Bank, to whom it will sell stakes in Sydney and Bristol airports if the bid goes through.

Britain's aviation regulator, the Civil Aviation Authority, recently said that bidders for BAA should plan for major upgrades to airport facilities when arranging their financing.

European airports have been drawing investors attracted by a highly visible, long-term outlook which predicts traffic in Europe will double by 2020, to 2 billion passengers.

BAA fought off Germany's Hochtief in December to buy control of Budapest's airport from the state for $2.2 billion.

BAA is the latest in a string of British firms to attract a foreign bidder amid a global boom in takeover activity.

Such is the appetite that hostile deals are becoming more common, with data firm Dealogic identifying 41 hostile and unsolicited bids worth a total of $238 billion globally in the first quarter of 2006, the second-highest quarter on record.