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Another look at the end of Goldman's BAA bid

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Things got pretty confusing the other day when the business wires carried stories claiming that a group of investors led by Goldman Sachs both was and was not still in the running to buy BAA, the world's largest airport operator. Today's Guardian explains why Goldman's bid was turned down, and why things got so confusing.

The US investment bank indicated that it was prepared to pay at least 955p. BAA turned it down on the grounds that its pledge lacked certainty, was subject to due diligence, and would need the green light from other consortium members, including Australia's Commonwealth Bank.
City sources said Goldman Sachs bankers were furious that they were prematurely halted from carrying out due diligence on BAA on Monday afternoon, prior to the completion of an auction of the firm in the evening - an allegation that BAA denies. Goldman also vigorously objected to a £115m break fee attached to Ferrovial's takeover of BAA, although the Takeover Panel has rejected its complaint.
On a day of confusion, Goldman issued an early-morning statement urging investors not to sell their shares to Citigroup, insisting that it was "in discussions" with the BAA board about a higher offer. But 20 minutes later, BAA flatly contradicted this, saying: "The board of BAA informs shareholders that talks between BAA and a consortium including Goldman Sachs' Infrastructure Group have ceased."
Hours later, Goldman Sachs conceded defeat, announcing: "The consortium, including Goldman Sachs' Infrastructure Group, confirms that discussions with the board of BAA have ceased. Accordingly, the consortium announces that it will not proceed with an offer for BAA."

And with those words, dozens of junior bankers and lawyers threw down their pens, picked up their Blackberries and typed, "Deal dead. See you this weekend."

Goldman Sachs unhappy over having to drop rival BAA bid