More on BAA
BAA: Revised Ferrovial bid
Shareholders who were patient enough to hold onto BAA shares have been rewarded. The company’s board announced that it recommended the acceptance of a revised offer from the Ferrovial Consortium valuing BAA at 950.25p.
Shareholders will be entitled to receive the proposed final dividend of 15.25 pence per share.
BAA’s management rejected a series of bids recently, the latest of which was at 870p.
We held the view that it would be difficult to justify BAA’s share price at 870p or above based purely on earnings and it will be interesting to see how Ferrovial plans to wring value out of the company at this price.
Falling levels of consumer spending, slowing economic growth, high oil prices and resurgent bird flu scares could dampen prospects for airlines and airport operators.
The share is currently trading at 949p, on a prospective PE (2007 earnings) of 20x with a yield of 2.8%.
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