Company Watch - Iberia.

Oct 1, 2007

A rival bid for Iberia could still emerge from Air France KLM, which is talking to Spanish investment firms Torreal and Inversiones Hemisferio, controlled by business entrepreneurs Juan Abello and Jose Manuel Lara respectively, one source familiar with the situation said. However, Air France's possible interest in ailing Italian airline Alitalia is delaying a decision on whether to launch a bid for Iberia, the source said. Sep 28, 2007

Air France has in the past not ruled out being interested in Iberia and has looked from a distance at Alitalia. It has also previously said that struggling Alitalia should be privatized and restored to financial health before it would consider making an offer, and it refused to take part in an Italian government auction that flopped earlier this year. Sep 28, 2007

Air France KLM is planning to team up with two Spanish firms to bid for Spain's Iberia against a group led by private equity group TPG, Expansion newspaper said on Sept. 26. The Air France KLM offer would keep 51 percent of Iberia in Spanish hands, allowing the airline to keep flying certain routes in Spain and abroad, the newspaper reported. Sep 26, 2007

Air France KLM said the expansion and bid for Spain's Iberia would bring on board two Spanish family investment vehicles -- Torreal, which belongs to Juan Abello, and Planeta, owned by the Lara family, the lead shareholder in Barcelona-based airline Vueling. Planeta declined to comment. Torreal was not immediately available to comment. In July, the airline said it might be interested in Iberia. TPG, in a consortium with British Airways and Spanish firms Ibersuizas, Vista Capital and Quercus Equity, has been talking to Iberia management for months and has made an indicative offer of 3.60 euros a share. Iberia stock closed at 3.25 euros on Sept. 25. Sep 26, 2007

Air France KLM will only consider making a bid for Spain's Iberia or Italy's Alitalia if the deal meets its target of an 8.5 percent return on capital after tax by 2009-2010, an airline executive said on Friday. Speaking at the autumn conference of brokerage Cheuvreux, Chief Financial Officer Philippe Calavia repeated that European consolidation was necessary. Air France added that the level of forward bookings for the next three months remained good and confirmed its current year outlook. Calavia said in a statement that unit revenues for the second quarter "should show a further rise year-on-year, while the improvement in the cargo division is continuing." Sep 28, 2007

TPG and British Airways Bid For Iberia Seen Late October. A formal bid for Iberia is likely to be made towards the end of next month as US private equity firm TPG and British Airways look to seal one of Europe's biggest airline takeovers, sources familiar with the deal said on Thursday. Sep 27, 2007

Bid For Iberia Seen Late October. A formal bid for Iberia is likely to be made towards the end of next month as US private equity firm TPG and British Airways look to seal one of Europe's biggest airline takeovers, sources familiar with the deal said on Sept. 27. The consortium, which also includes two Spanish partners, finished due diligence checks on the company in early September and has invited banks to join the financing, the sources said. Sep 28, 2007

Despite a global credit crunch jamming up leveraged buyout deals all over the world, financing for the acquisition of Iberia is progressing smoothly, the sources said, although it may have some impact on the price. The TPG and British Airways consortium submitted an indicative offer of 3.60 euros (USD$5.10) per share in March, valuing the airline at around EUR3.4 billion, but concerns over global credit and the airline's initial reluctance to open its books has kept Iberia's stock below the approach price since July 26. Sep 28, 2007

The biggest risk in cutting the Iberia bid value for the TPG and British Airways consortium would be a counter-offer from Air France-KLM, which has never ruled out being interested in the airline. A Spanish media report on Sept. 26 said it was preparing for a bid. British Airways chief executive Willie Walsh said on sept. 27 he was "pleased" at the way due diligence had gone after the group spent over a month looking over the books in Madrid. Sep 28, 2007

The TPG and British Airways consortium was denied access to detailed information on the profitability of Iberia's key routes, because its rival, British Air would see them. But if they fail to get a clear picture, the group may hold off making an outright bid and instead ask for more information, one of the sources close to the deal said. Alternatively the group could announce a bid price range and wait to fix the exact price until after it has seen further information on profitability. The source added that the outlook for Madrid-Barcelona flights, the world's busiest route, was key as a high-speed rail link between the two starts late this year. Sep 28, 2007

Editorial eMail: [e-mail] For Air Transport & Travel Business Experts contact our Director of Content Aram Gesar eMail: [e-mail]

For more global news, reviews, features and analysis, please subscribe to our Newsletters: http://www.airguideonline.com/order_formsubs.htm#news

To Advertise: [e-mail]

AirGuideFlightTracker is a new real-time service that keeps travelers informed on flight and airport status, delays, security wait times via the Web. For more go to http://www.airguideonline.com/airline_tracker.htm

Copyright [c] 2007 Pyramid Media Group. All rights reserved.