February 8: BAA faces Spanish acquisition

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February 8: Grupo Ferrovial, Spain’s second largest construction group, says it is considering a bid for BAA, the UK airports group which owns Heathrow and Gatwick. BAA shares jumped almost 15 per cent to 752½, the highest in about five years. This values the group at £8bn.

Although no price was given, Ferrovial said any bid would be in cash and would be likely to be made with other investors. The obvious name here is Macquarie, with which Ferrovial has several other investments, but we have our doubts. It sounds like Ferrovial was flushed out much sooner than it intended and it may take it another three weeks or so to get a proper offer in place.

BAA says it has not received an approach yet (of course, it says it is perfectly confident about the future of its business). But then nobody expects the Spanish Acquisition (whose main weapon, as every Python fan knows, is surprise).

With a senior investment banker in Marcus Agius as its chairman, BAA and its shareholders will be well-served. There is little risk of the debate being about anything other than value. We are putting together a great package of analysis for the paper with contributions from Kevin Done and Lina Saigol in London and Mark Mulligan in Madrid. Lombard will be commenting.

Strong sales of its blockbuster asthma and diabetes drugs lifted GlaxoSmithKline sales by 13 per cent in the fourth quarter and contributed to a 16 per cent increase in pre-tax profits for the full year. However, investors were disappointed that the company declined to give any guidance over a possible bid for Serono, the Swiss biotechnology company which failed to find a buyer at a $15bn auction in January.

BOC was eager today to demonstrate that it is well-position to keep growing as an independent company. The business has rebuffed a £7.6bn takeover approach from German rival Linde. BOC produced a 1.4 per cent increase in first quarter profits. Tony Isaac, BOC’s chief executive, have nothing very illuminating to say about the Linde situation. At £14.64, down 13p, the stock is still some way below the £15 Linde was proposing. Don’t expect a Pac-Man defence, incidentally: I’ve never met Isaac but he doesn’t sound like he has the head for heights he’d need. Also, it doesn’t sound like shareholders are at all keen on the idea.

Rentokil has confirmed Salamander Davoudi’s story that it is planning to sell its Manned Guarding division. Group 4 and Securitas are both interested.

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