UK. Hedge funds have been buying BAA shares at levels of up to +6% above the proposed price offered by Ferrovial, the Financial Times has reported.
Recent buying by hedge funds has supported the BAA share price in a trading range of 840 pence to 860 pence over the past two weeks. Yesterday the shares closed 1 penny lower at 848.
This compares with the 810 pence a share that Spanish construction group Ferrovial is offering in its hostile bid to acquire the operator of London Heathrow, Gatwick and Stansted airports. The bid values BAA at £8.75 billion (US$10.9 billion).
According to regulatory filings, Elliott Advisors (UK) increased its holding in BAA to 0.47% by Monday – up from 0.32% in late March – paying up to 860 pence a share, the FT said.
US hedge fund Paulson & Co has raised its stake twice this month, paying up to 841 pence. Last week Highbridge Capital Management paid 860 pence for BAA shares, after buying earlier in the month at 837 pence.
Fund managers told the newspaper that the trading showed hedge fund confidence that a buyer would win BAA at a significantly higher price than Ferrovial is offering. But few think shareholders will achieve more than 900 pence a share.
One manager told the FT: “If you consider that Goldman [Sachs] made an approach at 870 pence, General Electric is potentially stalking and some shareholders are saying they’ll hold out for 900 pence or more, it’s natural that hedge funds are buying above 810 pence.”
HOW THE BAA TAKEOVER SAGA HAS EVOLVED TO DATE
8 February:
City shock in the UK as Spain’s Ferrovial announces it may make offer for BAA
BAA releases statement on potential Ferrovial bid
BAA shareholder welcomes possible takeover approach by Ferrovial; Macquarie ‘no comment’
10 February
BAA is “˜in play’ say sources, as private equity group announces interest
13 February
BAA bid speculation heats up in the City
15 February
20 February
Macquarie Airports bid for BAA touted
24 February
Civil Aviation Authority warns BAA suitors that airport investment must be factored into financing
27 February
Observer newspaper predicts joint Macquarie/Ferrovial bid for BAA “˜within days’
2 March
Spain’s Abertis interested in buying BAA airport
3 March
Macquarie’s Mather speaks out on BAA bid interest
8 March
Fraport qualifies ‘interest’ in BAA-owned airports if break-up occurs
12 March
17 March
The phony war is over, now the real battle for BAA begins; Ferrovial responds to rebuff
‘Not in shareholders’ interests’ says BAA as it rejects Ferrovial’s ₤8.8 billion overture
20 March
22 March
Government warns BAA bidders they must invest
29 March
Ferrovial set to up the ante in BAA takeover as it appoints Macquarie as co-advisor
07 April
‘Not beginning to reflect the true value of BAA’s unique portfolio’; Ferrovial rebuffed
16 April
BAA confirms rejection of Goldman Sachs approach
16 April
Has BAA sparked General Electric’s interest?
21 April
21 April
Ferrovial’s BAA bid funded by 65:35 debt to equity
26 April
