BAA is believed to have agreed to sell itself to Spanish construction group Ferrovial in a £10 billion deal.
The fight for the airports operator took an extra twist yesterday when a consortium lead by Goldman Sachs made a £10.3 billion bid for the company.
The consortium is believed to have offered 940 pence per BAA share. BAA investors would have also get a final dividend of 15.25 pence per share, giving the offer a total value of 955.25 pence a share.
Ferrovial's offer, which is believed to have been accepted moments before the Monday deadline set for a bid, is believed to value the firm at 950 pence per share.
An official announcement is expected at some time this morning.
The Spanish group had a first offer of £9.73 billion offer rejected by BAA last week, who believed the 900 pence a share offer significantly undervalued the company.
Until now BAA has strenuously resisted any attempts to buy it, but last night directors of the firm were believed to have held a secret auction between the two rival suitors.
Airports are drawing investors attracted by a highly visible, long-term outlook with traffic in Europe expected to double by 2020 to two billion passengers.
Higher traffic will boost revenues from landing fees and airport businesses such as leases for shops and restaurants. Opportunities to buy major European airports are also low.
The battle for the airports operator had already taken a further twist yesterday when Commonwealth Bank of Australia confirmed it had joined the Goldman Sachs consortium.
Australia's second-biggest bank by assets said its Colonial First State Global Asset Management business would have an equity interest of more than £400 million in the Goldman consortium if it went ahead and was successful.
Colonial has investments in Australian airports in Brisbane, Perth and Adelaide.
The Commonwealth Bank is Australia's biggest fund manager with a total under administration of £54.8 billion at December 31. It bought Colonial six years ago.
Warwick Negus, Colonial chief executive, said it had been working with the Goldman consortium for the past few months.
Last Friday, Ferrovial launched a failed raid on BAA's shares in a bid to fend off the Goldman consortium.
BAA, which also owns Glasgow and Edinburgh airports and has interests in several Australian ones, had sought to keep shareholder support by boosting its dividend and offering to buy back shares.
Meanwhile British Airways, Europe's third-largest airline, said passenger traffic rose as expected in May as more holidaymakers travelled in business class, but warned the soccer World Cup could keep people at home in June.
BA said it had increased capacity by 20 per cent for flights in and out of Germany over the next month but said some business travel may drop off as fans stay at home during the four-week tournament which starts on Friday.
"The flipside is as everyone sits at home watching England hopefully win they are going to be taking less business trips. There is the potential that it reduces the traffic," BA's head of investor relations George Stinnes said.
BA saw a big increase in first and business class traffic last month carrying 3.5 per cent more passengers against May 2005.
Nearly 3.2 million people travelled on BA scheduled services, with premium (first and business class) traffic rising 13.9 per cent.
The biggest passenger increase was on Africa and Middle East routes ( up 18.5 per cent), with Asia Pacific up 8.9 per cent, North and South America rising 5.2 per cent and UK and Europe increasing one per cent.
Shares in BAA closed last night up 23p at 928p.