Spain’s second largest carrier Vueling has rejected a takeover bid from British Airways and Iberia parent International Airlines Group.
The board of the budget airline said the €7 a share offer did not reflect the company’s value.
IAG, which already owns 45.85% of Vueling, offered to buy the rest of the carrier in November in a bid to stem losses in Spain and shake up its short-haul business in the country.
The offer represented a 28% premium but the Vueling share price has since soared as the Barcelona-based carrier’s market share in Spain grew and it posted a 300% jump in 2012 net profit, Reuters reported.
“The price offered, which supposed a 27.97% premium when it was announced, has been surpassed in such a way that the trading price is now higher than the offer, with no premium for the increased control,” the board said in a statement to the Spanish stock market regulator last week.
IAG said last month it had ruled out raising the €113 million bid, although it could waive the initial condition it set of a minimum acceptance of 90% of non-IAG shareholders.
Vueling shareholders have until April 8 to say whether they accept the offer or not.
Analysts believe IAG may want to use Vueling’s low-cost base to help solve problems with Iberia, which plans to lay off thousands of staff and cut salaries by 20% in what the airline calls “a fight for survival”.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.