The prospect of BA owner IAG making a renewed bid for budget rival Norwegian Air Shuttle is being played down after a sharp drop in the latter‘s share price yesterday.

The value of the fast-growing carrier fell after reports in the Spanish media that IAG was prepared to make an offer valuing the airline at £1.3 billion.

However, The Times reports that the Norwegian share price fall by NKr20.10 to NKr250.50 indicating no such deal was forthcoming as no investors came in to buy stock in the airline in anticipation of a buyout.

IAG took a 4.6% stake in Norwegian in April saying it was a position from which it would start discussions that could lead to a full offer.

The BA owner has since made a second unsuccessful approach although IAG has denied its made any formal offer and Norwegian founder and chief executive Bjorn Klos has spoken of his desire to remain independent and said selling the carrier has not entered his mind.

IAG made no comment about the latest speculation, The Times reported.

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