BAA, the former British Airports Authority, faces a second foreign takeover bid within days from a consortium led by Australian investment conglomerate Macquarie Bank, which is expected to table an offer worth between 850 pence ($A20.50) and 900p a share.
Macquarie, which recently made an unsuccessful bid for the London Stock Exchange, has teamed up with US private equity giants KKR and Blackstone, but the composition of the consortium is not finalised and could change.
Sources in London's financial district, the City, said that Spanish construction company Ferrovial, whose 810p a share bid for BAA was rejected on Friday, could join Macquarie and so could some of its backers, including Royal Bank of Scotland.
"Things move very quickly in situations like these," said an investment banker.
Macquarie and Ferrovial already jointly operate airports in Bristol and Sydney. The City was baffled by Ferrovial's low offer, which came in below the 839p a share level at which BAA's shares were trading in the market. A transport analyst said: "Ferrovial's bid could have been a way of simply withdrawing from the contest or, more likely, a ruse to flush out Macquarie."
Robert Waugh, head of equities at Scottish Widows, which holds 3.46 per cent of the company, supports a bid of at least 900p for BAA, which would value the target at more than £9.5 billion. He was quick to back BAA management on Friday, when it rejected Ferrovial's £8.7 billion offer on the grounds that it undervalued the company.
European airports have been drawing takeover bids amid forecasts that air traffic in Europe will double to 2 billion passengers a year by 2020. Macquarie has built a privately-owned airports group holding controlling stakes in airports in Copenhagen, Brussels and Rome.
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