Texas Pacific Group is contemplating a 3.4 billion-euro or $4.5 billion takeover bid for Iberia Lineas Aereas de Espana SA, Spain’s largest airline, as trans-Atlantic carriers prepare for more access to routes by next year. Madrid-based Iberia has said in a regulatory filing that the buyout company has asked for information about the carrier as it considering a cash offer of 3.60 euros a share. However, the offer represents 10 percent less than the airline’s last closing price of 4 euros.
In the meanwhile, TPG has reportedly approached the British Airways; the UK airline owns a 10 percent stake in Iberia. Both the firm Texas Pacific and British Airways have declined to comment on their talks. However, BA owns 10 percent of Iberia and will have the first right of refusal over another 30 percent. And this equation has placed BA in a strong position to stymie any bid.
In a statement, Iberia has said the private equity group had asked for permission to view its documents, and the board would meet in the next few days to consider the approach. It further said, ‘this approach does not constitute in any way an offer for all or part of Iberia’s capital, nor does it create any legal obligation or binding agreement for TPG’.
As a matter of fact, the recently concluded open-skies agreement that opens transatlantic travel to more carriers in coming months has fuelled assumptions in the market that it could lead to a rash of mergers in the airline industry.
In a separate move, Texas Pacific is also considering a bid for Italian airline, Alitalia. Italy is planning to sell off its troubled airline, which is losing more than a million euros a day. Texas Pacific Group is among five bidders short-listed as the prospective buyer.
