June 6: BAA shareholders offered equity

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June 6: BAA shareholders are being offered a share alternative under the cash deal agreed last night with Ferrovial of Spain. This will consist of shares in a vehicle listed on Aim, which will own 5-10 per cent of the company into which BAA will be injected. The offer document shows investors can also have continuing exposure to BAA equity through some of the bonds being used to finance the £10bn deal, which convert partly into equity into the Aim-listed vehicle. Separately, Ferrovial confirms it has bought 14 per cent of BAA, which makes it more awkward but not impossible for the Goldman Sachs-led team to trump the Spanish offer.

Because the Takeover Panel has moved the timetable back by a week, Goldman now has until next Friday to make a higher offer. It indicated a willingness to do so last night, when it said it would offer 955¼p compared with the 950¼p offered by Ferrovial (both include the 15¼p dividend BAA had already promised its shareholders). But at around midnight, the BAA board considered the Spanish offer more deliverable and accepted a small discount for certainty (plus that stub equity). But don’t expect Goldman to walk away. And if it comes back with a formal offer, the takeover table will be reset to nought. BAA has already got the price it wanted it, but could get more still. Marcus Agius, BAA chairman and Lazard banker, seems to be playing a blinder, although BAA shares are only up a touch at 947½p. Ferrovial shares are lower on fears they are over-paying.

Having covered the story into the small hours last night, our journalists have been updating the coverage on FT.com this morning. You can also go there for Lex. We are now working out how best to develop our coverage for tomorrow’s paper.

There is some other news, of course.

Carphone Warehouse has confirmed the weekend stories about its struggle to cope with demand for its new “free”-ish broadband offering. Charles Dunstone was on the Today Programme this morning at 7.17am talking about it. The group has published strong full-year results.

There are good full-year figures from Severn Trent, mixed full-year figures from Ryanair, and Boots has posted the documents relating to its merger with Alliance Unichem to shareholders.

There should be news later out of our online Q&A session with Sir Terry Leahy, Tesco’s chief executive. This has already drawn huge reader interest. He will answer your questions from 3.30pm today, so there’s still time to submit a question.

Speaking of great retailers... This morning’s story about Archie Norman setting up his own private equity venture was a good one. But was I the only one who couldn’t help remembering how the market went knuts for Knutsford? What a non-event that turned out to be. Perhaps he’ll have more success this time.

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