Caja Madrid strengthens position in Iberia fray

21st November 2007, Comments 0 comments

21 November 2007, Madrid - BBVA announced on Monday night that it had agreed to sell its 6.9-percent stake in Spanish airline Iberia to savings bank Caja Madrid.

21 November 2007

Madrid - BBVA announced on Monday night that it had agreed to sell its 6.9-percent stake in Spanish airline Iberia to savings bank Caja Madrid.

The sale, at €3.60 per share, would make the bank the biggest single investor in the airline, with a total stake of 16.9 percent, and put it in a strong position among a core group of investors to negotiate with potential buyers.

Iberia is currently being courted by two bidding consortia: the first led by British Airways and private equity firm TPG, and the second led by Spanish private equity firm Gala Capital.

BBVA will make €230 million from the sale, pocketing capital gains now, with an agreement with Caja Madrid that it will claim the difference should the bank "make determined sales or purchases of shares or participate in a takeover" within a year.

Speaking yesterday, Caja Madrid president Miguel Blesa made clear that the bank "would not sell" its shares in the airline, and that the movement of capital to Iberia signifies the bank's "vocation of permanence."

Asked whether the bank would form part of a consortium to purchase Iberia, Blesa responded saying that currently that option "was not being examined," although he did not rule it out for the future.

The market was unimpressed by the move, however, with Iberia's share price falling 1.69 percent yesterday.


[Copyright EL PAÍS, SL. 2007]

Subject: Spanish news

 

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