BAA in break-up threat

[Kingfisher]

Britain's dominant airport operator BAA is facing the threat of a break-up
after the Office of Fair Trading yesterday announced it was considering a
full-blown review of the business (The Guardian). BAA runs Edinburgh,
Glasgow and Aberdeen airports. The OFT wants to find out is the airports
market works well for consumers. The intervention of the competition
watchdog was a hammer blow for Spanish firm Ferrovial, which has been waging
a hostile takeover campaign for BAA since February. Analysts claim it seemed
unlikely Ferrovial would press ahead with its bid with the threat of an
inquiry hanging over the operator. The OFT said it plans to make a detailed
announcement on the scope of its review by the end of June. Among possible
outcomes BAA could eventually be forced to sell off one or more of its
airports. The possibility of an eventual break-up prompted a steep fall in
BAA's share price (Financial Times). The share price closed down 46.5p or
5.6% at 787.5, cutting the market's capitalisation by £500 million to £8.5
billion. BAA was the biggest loser in the FTSE 100 as it dropped for the
first time below the Ferrovial bid price of 810p.

[Joe Curry]

Post by Kingfisher
Britain's dominant airport operator BAA is facing the threat of a break-up
after the Office of Fair Trading yesterday announced it was considering a
full-blown review of the business

Not before time either... How many times have the Mergers and Monopolies
Commission
failed to act? More power to the OFT's elbow!