Iberia shareholders Caja Madrid, BA holding talks

15th January 2008, Comments 0 comments

Spanish airline persistent object of takeover speculation.

15 January 2008

MADRID - British Airways confirmed Monday it had held a series of talks with Spanish savings bank Caja Madrid on Spain's leading airline Iberia.

In November of last year, Caja Madrid became Iberia's leading shareholder with a 23 percent stake after buying the holdings of other members of a syndicate of stakeholders. BA holds a 10-percent interest in the Spanish airline.

Spanish newswire service EFE quoted a BA spokeswoman as saying Caja Madrid and BA officials held their last meeting over the weekend and plan further contact to explore future opportunities. The spokeswoman declined to reveal the content of the talks.

She was speaking in response to a report by Spanish financial daily El Economista that the talks centre on reviving earlier plans for a merger of the two airlines.

Speaking at a news conference yesterday Iberia Chairman Fernando Conte declined to comment on the report. "These are press reports I can't give an assessment of," he said.

A consortium of Spanish investors led by the Gala Capital fund has made a takeover approach to Iberia at a tentative price of between EUR 3.6 and EUR 3.9 per share.

Gala wanted access to Iberia's books as a prior step to lodging a possible firm offer for the carrier. However, at the end of last year Iberia declined Gala leave to do so citing the disruption caused by third parties who had not tabled binding offers.

After putting a damper on takeover talks, Iberia's share price had fallen over 13 percent this year. The stock, however, recovered a modest 0.38 percent yesterday to EUR 2.61 after having risen to as high as EUR 2.73.

Separately, Conte said yesterday the Spanish airline industry faces a tough year because of high oil prices and strong competition on some routes. "It is foreseeable that the earnings of the sector in 2008 will not be as good as in 2007," Conte said at a news conference organised by the Spanish association of tourist operators Exceltur.

Conte said he did not expect the price of a barrel of oil to below the USD 80-90 level. Crude has touched record highs of over USD 100 of late.

He said there would be strong pressure on costs, with airlines unable to fully pass this on the customers. Iberia already has a fuel surcharge in place of up to EUR 90 per flight

[Copyright EL PAÍS 2008]

Subject: Spanish news

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