BAA, the owner of Britain's seven largest airports, has reportedly drawn up plans to hand back cash to shareholders in the event of a higher hostile bid.

The company, headed by Mike Clasper, pictured right, rejected an offer of 810p a share from a consortium led by Ferrovial, the Spanish infrastructure group, on Friday.

Fearing Ferrovial or a rival bidder could return with a much higher offer, closer to 900p a share, BAA has prepared plans for a special dividend of up to é1bn to keep shareholders onside, according to reports.

Looming

To fund a special dividend BAA is likely to have to raise additional debt. In February, the company raised almost é2bn, bringing its net debt to é5.3bn. Ferrovial was forced into revealing details of its offer on Friday by a looming deadline from the Takeover Panel to announce a firm intention to bid or walk away by April 24.

The offer document shows it wants to keep together BAA's UK airports and to work with the UK government and the Civil Aviation Authority to deliver industry plans on runway and terminal development.

BAA's UK estate is made up of Heathrow, Gatwick, Stansted, Southampton, Aberdeen, Glasgow and Edinburgh airports. Tweet