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Alitalia blow as offers drop below market price.

ROME: Two offers for ailing Italian airline Alitalia are far below market price, with one bid of just one euro cent a share, a source close to sale talks said, sending shares into a tailspin that prompted their suspension.

Domestic minnow Air One has offered just one euro cent per share, the source said yesterday.

Air France-KLM has offered 35 euro cents per share - but even that only values the Italian flag carrier at about 485 million euros ($704.8m), less than half what the market thought it was worth on Thursday.

Shares in the loss-making airline, which has been hawked by the government for nearly a year, tumbled and trading was halted several times..

"The offer by Air One is at one cent per share," the source said, adding that Air France's offer is at 35 euro cents per share.

The offers are non-binding and both can be reviewed, sources said.

Alitalia said in a statement the bid prices were "not full and complete," adding that as they pertained to non-binding offers, they were "a mere first reference to value."

The bid from Air One, backed by Italy's biggest retail bank Intesa Sanpaolo, would be politically expedient as it would leave control in Italian hands while that of Air France-KLM would take the carrier off the government's hands permanently.

Unions, worried over potential heavy job cuts in both offers, threatened yestereday to strike unless the government consulted them before choosing a buyer and told them what the bidders' plans were.

Roberto Formigoni, a key politician in the region where Alitalia's Milan hub is based, also called on the government to give details of the plans.

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Publication:Gulf Daily News (Manama, Bahrain)
Date:May 1, 2008
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