Airport operator BAA, has pledged to hand £750m back to its shareholders as part of its defence against a hostile takeover from Spanish contractor Ferrovial.

In statement released on Monday, BAA said it would be shortly sending out a letter to shareholders outlining its plans to return the capital, which would be conditional on the firm beating off a bid from Ferrovial, or any other firm.

The BAA board has already rejected Ferrovial's 810p-a-share offer for the company, which values it at £8.75bn, on the grounds that it undervalues the company.

Investment bank Goldman Sachs has indicated that it is considering making an offer for BAA of 870p-a-share, valuing the company at £9.4bn. However, no bid has materialised and BAA has made it clear that should a bid be forthcoming it would be rejected.

Shares in BAA fell by 1.5% when the announcement was made on Monday, but recovered on Tuesday to close at 836p.