BAA, the airports operator at the centre of a potential takeover bid, has agreed to change the terms of a £2 billion bond issue in a move that would increase the costs incurred by a predator.

This week Grupo Ferrovial, the Spanish group, expressed an interest in BAA, which owns Heathrow and Gatwick among other airports. Ferrovial has said it is considering making a cash offer, likely to be more than £8 billion, for BAA as part of a consortium.

The Times reported today that Star Capital Partners, the private equity firm, is also understood to be eyeing the company.

BAA's decision to amend the terms of its recent notes will reassure bond investors following the surprise Spanish approach earlier this week. BAA bonds fell sharply when news of the Ferrovial interest emerged.

BAA has introduced a noteholder put provision, giving investors the right to sell the bonds back to BAA at maturity value plus interest if a change of control occurs and the rating of the notes is withdrawn or reduced to junk status.

An independent financial adviser would also have to certify to the trustee for the noteholders that the change of control is materially prejudicial to the interests of the noteholders.

One bond market specialist told Times Online that changes to the terms of the bond issues "will act as a sort of poison pill" by increasing the buyer's financing needs.

He added: "I wouldn't say that it will kill the deal but it does make it more awkward and could put off some of the funding banks involved."

It is thought that the cost of funding could increase Ferrovial's borrowing costs by around 10 basis points.

Ferrovial has declined to comment further on its bid interest or partners. The Spanish group, which is worth about £6.4 billion, is likely to recruit more than one financial backer to finance a bid.

On Febuary 2, BAA launched and priced three bond issues, raising a total of just under £2 billion. It issued €1 billion of 3.875 per cent bonds due Febuary 2012, €750 million of 4.5 per cent bonds due Febuary 2018 and €750 million of 5.125 pct bonds due Febuary 2023.

BAA said the proceeds would be used to repay existing debts and to pre-finance its ongoing capital expenditure, including the £4.2 billion Terminal 5 project at Heathrow.

Ferrovial’s admission, triggered by a Takeover Panel inquiry, could flush out other prospective bidders for BAA, including Vinci, the French group, and Australia’s acquisitive Macquarie Bank.

Macquarie, which part-owns Bristol airport with Ferrovial, has refused to rule itself out of a BAA bid, with or without Ferrovial. When approached by The Times, a spokesman would say only that the company had not been approached by Ferrovial to join a bid consortium

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