UK airports operator BAA will reward shareholders with a £750m (€1.1bn) capital return if they refuse to back an £8.8bn hostile takeover bid from a consortium led by Spanish conglomerate Ferrovial.

BAA today confirmed that it is planning to return cash to its shareholders as part of its defence strategy against the bid. The capital return, which will be detailed in a document sent by BAA to shareholders this week, is lower than the £1bn analysts had expected.