Swiss-British fund join bidding for Iberia Airlines

29 May 2007

MADRID – A Swiss and a British fund, the names of which have not been made public, have joined the bidding for Spanish airline Iberia, sources close to the deal told Efe.

Texas Pacific Group and Apax Partners have already shown interest in acquiring Iberia.

The sources added that one of the two new funds, “presumably” the Swiss one, is negotiating with German airline Lufthansa to make an offer, which will be forwarded within two weeks, but the president of Lufthansa has said repeatedly that his firm is not interested in Iberia because the price is too high.

On March 30, TPG outlined a bid for Iberia worth 3.6 euros ($4.85) per share and requested further information from the carrier, and in April Lufthansa considered raising the offer to 4 euros per share ($5.20), a move that was finally rejected.

While it is still possible to speak of four potential candidate groups, only the one headed by TPG, which includes British Airways (BA) as industrial partner and the Spanish private equity funds Vista Capital, Ibersuizas and Quercus, has presented a written offer.

Meanwhile Apax Partners, which was rejected by British Airways according to sources consulted by Efe, has not yet thrown in the towel and continues looking for associates with which to make its bid, considering as its possible industrial partner Lufthansa itself or KLM-Air France.

The operation launched by TPG, BA and Spanish private equity funds intends to maintain the British airline’s 10 percent holding, with the remaining 39 percent for sale in the international section managed by TPG.

British Airways has all along been Iberia’s preferred suitor, given that it already owns 10 percent of the Spanish airline and has the right of first refusal on a further 26.5 percent stake currently in the hands of the so-called core shareholders.

Under the potential takeover bid, 49 percent of the carrier would be controlled by a foreign equity fund as financial partner and by an airline as industrial partner, while 51 percent of the company would remain under Spanish control in order to preserve international traffic rights.

Regarding the three Spanish private equity funds that would control 51 percent of Iberia, thus preserving the “Spanishness” of the company, Vista Capital hopes to have between 20 and 30 percent of it, sharing out the remainder between the other two.

The Iberia board of directors in a meeting last week decided to take no decision on the request for information from the above-mentioned consortium and to study its answer at the next meeting.

Iberia capital is currently divided among the so-called core shareholders that together own 36.5 percent and which is distributed among British Airways with 10 percent, Caja Madrid with 10 percent, BBVA with 7.07 percent, Logista with 6.49 percent, El Corte Ingles with 2.9 percent, and several funds and financial groups with 0.64 percent.

The remainder of the capital is in hands of the State Society of Industrial Shares (SEPI), which has 5.2 percent, and the stock market with 57.99 percent. EFE

[Copyright EFE with Expatica]

Subject: Spanish news