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BAA in £9.5bn airport spending plan

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AIRPORT OPERATOR BAA said last week that £9.5bn must be spent by 2015 on expanding its London airports to meet expected passenger growth.

The company is currently fi ting takeover bids from Spanish group Ferrovial and a consortium led by US investment bank Goldman Sachs with UK based HBOS.

The announcement was made as part of BAA's 10-year traffic forecast, which predicts 3% annual passenger growth.

In April, Ferrovial made an 810p a share offer to buy the company, valuing BAA at £8.75bn. Ferrovial also pledged to uphold the investment plan set out by BAA.

But the bid was rejected by BAA. Chairman Marcus Agius told shareholders that the offer was too low.

This offer was followed by an offer of 870p per share by the Goldman Sachs/HBOS consortium, valuing the company at £9.4bn. This was also rejected.

Of the £9.5bn BAA plans to invest, £6.2bn will go on upgrading Heathrow, completing Terminal Five and building the new Heathrow East terminal to replace Terminals One and Two. A further £2.5bn will go on Stansted and £800M at Gatwick.

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