Alitalia yet to respond to KLM takeover bid

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Alitalia has not yet responded to a takeover bid by French-Dutch carrier AirFrance-KLM.

13 December 2007

ROME/AMSTERDAM - Alitalia has not yet responded to a takeover bid by French-Dutch carrier AirFrance-KLM, KLM Managing Director Peter Hartman told reporters on Wednesday.

On 6 December AirFrance-KLM made a non-binding takeover bid for Italy's struggling national carrier. No financial details were released.

Italy's second largest airline AirOne and a group of Italian investors headed by the former chairman of Italy's state broadcaster RAI also made takeover bids last Thursday.

Hartman said KLM expects Alitalia to notify all bidders before the end of the month who has been selected to negotiate the takeover. Italian Transport Minister Alessandro Bianchi on Wednesday, meanwhile, said the announcement of the winning bid would be made Thursday after a meeting of Alitalia's board.

Bianchi said the Italian government was due later on Wednesday to examine offers to buy the state's controlling stake of 49.9 percent in Alitalia.

"Today we will look at the offers presented and we will decide," Bianchi said in a radio interview.

"An important country such as ours can't do without a carrier of reference," Bianchi told private broadcaster Radio 24.

Hartman, meanwhile stressed he did not expect the European Commission to block a possible takeover of Alitalia by AirFrance-KLM.

"The alternative is Alitalia's bankruptcy," he explained. "The European Commission does not want that."

Last Thursday, Europe's largest low-fare airline Ryanair requested the European Commission block Air France-KLM's bid for Alitalia until both airlines have paid back EUR 2.7 billion in what it calls "illegal aid" from the French and Italian governments.

Alitalia has been in financial distress for many years. In the third quarter of this year, the company suffered a loss of EUR 58 million before taxes.

AirFrance-KLM in a non-binding, so-called Letter of Interest issued when it presented its bid last week, set out all the benefits a merger between the companies could bring for both sides.

On Tuesday AirFrance-KLM CEO Jean-Cyril Spinetta said his company did not plan to convert Alitalia into a regional carrier, a concern raised by many Italian political and business leaders.

Fears have also been expressed that AirFrance-KLM may wish to concentrate activity only at Rome's Fiumicino airport, downsizing operations at Milan's Malpensa hub - a move which could result in thousands of job cuts.

While few details of the offers have been made public, AirOne - which is backed in its bid by Italy's largest bank IntesaSanpaolo - has indicated it would cut some 3,700 Alitalia jobs.

Unions have staunchly opposed any privatisation plan that would require major job cuts and the government's previous bid to sell its Alitalia stake through an auction collapsed in July after potential buyers rejected conditions including a limit on the number of lay-offs.

[Copyright dpa 2007]

Subject: Dutch news

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