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 £10bn, which would trump the £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.