BAA eyes China as UK growth slows
Mar. 28, 2006
Bid target BAA said on Tuesday it was considering investing in airports in China as passenger growth at its UK airports slows this year, but said no more on the takeover proposal from Spain's Grupo Ferrovial.
BAA, which owns London's Heathrow, Gatwick and Stansted airports, said it was performing in line with its expectations and predicted passenger numbers at its UK airports would rise just over 2 percent this year.
Chief Executive Mike Clasper said BAA was looking at investing in secondary airports in China, though any investment would not be on the same scale as last year's GBP?1.3 billion (USD$2.27 billion) acquisition of Budapest Airport.
"What we are looking at are the secondary airports, but given the way the Chinese economy is booming, the secondary airports are millions and millions of passengers," Clasper told reporters after releasing a trading update.
BAA earlier said passenger growth at its UK airports would slow as expected from 4 percent over the past two years, partly due to the impact of July 7 bombings in London and a softer economy. It was expected to rise to 3.3-3.5 percent next year.
This was partly offset by cost savings and higher sales at airport shops in the second half of the year. Net retail income per passenger at its UK airports was expected to grow about 2 percent for the current year.
However, higher staff costs, energy prices and business rates would push operating costs up 8 percent for the year, it said.
Clasper declined to say anything new on Ferrovial's GBP?8.8 billion (USD$14 billion) bid for BAA. BAA rejected the offer earlier this month, and Ferrovial is meeting shareholders this week to promote its offer.
He repeated comments the company made earlier in March that Ferrovial's bid did not reflect the true value of its assets and its "exceptional set of opportunities".
Britain's Takeover Panel has set Ferrovial a deadline of April 24 to either announce a firm bid or walk away.
BAA said Budapest Airport was performing in line with its business plan, while construction of a fifth terminal at London's Heathrow Airport remained on budget.