BAA are reported to be considering putting London Gatwick Airport up for sale for £2.5 billion (US $ 4.725 billion) as a defence against the two unwanted take-over bids from the Spanish construction company, Ferrovial, and the consortium led by US bank, Goldman Sachs:
It appears that this move is beoing made to demonstrate that the breakup value of BAA is worth considerably more than that of the current bids. The article says that LGW 'makes up only about 15 per cent of BAA's assets'. While a sale of £2.5 billion would therefore suggest that the asset value of BAA is of the order of £16.7 billion compared to its current market capitalisation £9.783 billion based on a share price of £9.05 compared to Ferrovial's recently increased offer of £9.00 a share, this ignores BAA's not insignificant debt incurred, for example, in building T5 at LHR.
When Ferrovial launched 'a massive dawn raid' to buy BAA shares on the London Stock Exchange on Friday morning it 'largely failed as big shareholders . . . refused to sell their shares [at the prevailing market price]'.
Will BAA survive? What happens to BAA's development plans for LHR East if it does not?
[Edited 2006-06-04 13:55:58]