Investment bank joins forces with Commonwealth Bank of Australia for takeover bid for UK airport operator.

Goldman Sachs has joined forces with Commonwealth Bank of Australia to make a rival offer to Spanish contractor Ferrovial for UK airport operator BAA.

The investment bank is leading a consortium that has been given a deadline of this Friday, 9 June, to confirm it will definitely make a bid or walk away.

City sources believe that Goldman Sachs could be preparing to make an offer as high as 拢10bn, which would trump the 拢9.75bn hostile takeover bid already made by Ferrovial.

The board of BAA has rejected the Ferrovial offer and has advised shareholders to do the same.

It believes that Ferrovial's 900p a share offer undervalues BAA and that it is worth at least 940p a share. Ferrovial has a been given a deadline of today to make its best and final offer.

Goldman Sachs, also backed by Colonial Insurance, AIG and Canadian funds Borealis and Ontario Teachers, has been reluctant to make a hostile bid for BAA.

Shareholders are likely to wait and see if a higher bid from Goldman Sachs materialises before making a decision on whether to back Ferrovial.