BAA has rejected a new £9.73 billion offer from Spanish construction firm Grupo Ferrovial.
BAA said last week it believed it was worth more than £10 billion and sought to keep shareholder support by offering a 40 per cent increase in dividends and a £750 million share buyback.
"The board is clear that it still falls well short of the true value of the company. The board is also clear that the revised offer does not reflect a suitable premium for control of BAA's unique assets," the airports operator said today.
Ferrovial said BAA's own valuation failed to reflect a number of factors, including uncertainty over its growth prospects in the highly regulated UK airports market and failures to cut costs and meet its own UK passenger growth forecasts.
The Spanish firm, which raised its offer to 900 pence a share in cash for the owner airports operator from the previous proposal of 810p, said BAA's recent claim to be worth more than 940p a share was "not credible".
It said the new bid, which also includes offers for BAA's convertible bonds, was 41 per cent above BAA's average share price for the 30 days ended February 6th, the day before speculation emerged about a possible offer for the British group.