Downright stupid?!?!

The deal is as ‘risky’, as it is ‘potentially profitable’

“Stupendously Electrifying?” Or “Downright Stupid?” Take your pick; choose the statement which you find the best to describe Grupo Ferrovial’s $18.9 billion acquisition of British Airport Authority (BAA), given the fact that this sum is twice Grupo’s own market value of $11 billion! After the Grupo’s Chairman & CEO, Rafael del Pino succeeded in gaining approval from BAA’s guardians on June 07, 2006, following many rejected bids (the last being for $18.28 billion), doubts still remain over Ferrovial’s decision! According to BAA, passenger traffic over the next decade would appreciate by 4% per annum, but unfortunately, BAA has forecast that it would also have to shell out an eye-popping $17.55 billion as investment in the coming years in order to meet this rise in its passenger traffic!

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Source:- IIPM-Editorial, Editor:- Prof. Arindam Chaudhuri - 2006