Beaucaire
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Iberia Rejects BA Bid...

Fri May 25, 2007 6:26 pm

Following the French edition of Air&Cosmos,Iberia have rejected the joint offer by British Airways and TPG.
Now the rival group APAX have contacted Air France and Lufthansa to make competing bids.
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SKY1
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 7:06 pm

....this affair is turnning a bit black.
Time flies! Enjoy life!
 
scouseflyer
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 7:33 pm

Am I right in thinking that BA owns 10% of IB and has rights over another 30% of the shares - ie they could block anyone else buying them?
 
Beaucaire
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 7:42 pm

The attitude of IB management is a little ridiculous,in that they are trying to push the bids way over the actual value of the company.
LH have said they are not interested in biding for IB at those share-levels.They see the usefulness of buying IB but not at any price.
If TPG and BA will increase their offer, the cost of buying IB might just be too high and make it economically unsustainable.I rather then would buy Alitalia for 1 Billion and add another 2 billion in paying debt,restructuring and lay-off payments.4 billion for IB is not a good deal !!!
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scotron11
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 8:05 pm

Quoting Beaucaire (Reply 3):

The attitude of IB management is a little ridiculous,in that they are trying to push the bids way over the actual value of the company.

I haven't seen any other reports to indicate that IB have "flat out" rejected the TPG/BA bid, just some items that some shareholders in IB were not happy with the amount that TPG have offered. As it is, BA has declined to put any money into this deal and if they did sell their 10% holding they would make quite a nice profit on their initial investment.

TimesOnline does not think it's a good idea that BA should get involved with IB, flights to SA not withstanding. They think BA should seek out an Asian airline instead.
 
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autothrust
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 8:18 pm

Quoting Beaucaire (Reply 3):
.I rather then would buy Alitalia for 1 Billion and add another 2 billion in paying debt,restructuring and lay-off payments.4 billion for IB is not a good deal !!!

Why Alitalia? This airline wasnt profitable in 10 years. Even you would restructure it i highly doubt it would be a big cashcow. On the other side privatized IB has almost monopoly in Europe - Latin America Routes and is pretty profitable since years. I really hope LH and IB merge they just fit better, even the fleets are similar.
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SKY1
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 8:26 pm

Quoting Scotron11 (Reply 4):
shareholders in IB were not happy with the amount that TPG have offered.

That's logical.

Quoting Scotron11 (Reply 4):
They think BA should seek out an Asian airline instead.

Then, go ahead BA
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dme
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 9:46 pm

I suppose that IB share-holders want more than what BA/TPG is able/capable of giving. Another possible thing is that perhaps BA is trying that some other investors (APAX and either AF/KLM or LH) eye IB so that the IB price might increase and then BA can sell better the percentage it holds in IB.
Regards,
Dme.
 
vv701
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RE: Iberia Rejects BA Bid...

Fri May 25, 2007 10:06 pm

Quoting Scouseflyer (Reply 2):
Am I right in thinking that BA owns 10% of IB and has rights over another 30% of the shares

I think their outstanding option is for 27 (not 30) per cent. But that makes hardly any difference.

Quoting Scouseflyer (Reply 2):
ie they could block anyone else buying them?

Yes. What would be interesting to know is when the BA options expire and at what price they were granted. One outcome could be that BA exercises its option, accepts an alternative bid and makes a lot of money on both its 10 and 27 per cent.
 
bullpitt
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 3:59 am

BA are not the only ones who have options some of the other major investor have them also and they are the ones who are not sure about the deal (Caja Madrid) or are not even sure they want to sell (El corte Ingles) All IB has done is not to release certain financial information requested by TPG until things are clear with the major investors.
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Lan1981
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 4:03 am

Guys, I still haven't seen anything regarding IB rejecting the consortium's offer....I've checked Financial Times, BBC, Economist and El Pais.

If someone could give a link to the relevant info I'd appreciate it.

LAN
 
A342
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 4:05 am

Quoting Beaucaire (Reply 3):
The attitude of IB management is a little ridiculous,in that they are trying to push the bids way over the actual value of the company.

Why not? It would the investor's fault buying them if that should be the case. Of course IB wants as much as they can get.
Exceptions confirm the rule.
 
Beaucaire
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 4:14 am

Quoting Lan1981 (Reply 10):
Guys, I still haven't seen anything regarding IB rejecting the consortium's offer....I've checked Financial Times, BBC, Economist and El Pais.

If someone could give a link to the relevant info I'd appreciate it.

LAN

http://www.reuters.com/article/innovationNews/idUSL2553965320070525
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Lan1981
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 4:27 am

Thank you very much Beaucaire, really interesting article.

I wonder what will happen; BA has said it will not add any of its own money; Lufthansa say Iberia is too expensive & AF/KLM have denied interest.

The story continues....
 
JAL
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 5:19 am

I haven't heard anything with regards to BA bid being rejected. Beside, I really don't think BA is going to let IB move to other Star or Skyteam.
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commavia
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 5:46 am

This appears to be shaping up to be frought with intrigue in the future.

As I understand it, Iberia's rejection of the joint BA/TPG bid notwithstanding, BA is still in the position of pseudo-kingmaker in any potential Iberia buyout deal. With its existing 10% holding in the company, and first righ of refusal on, if I'm not mistaken, about another 25%, they have the ability to control upwards of one third of the company's entire public share capital. When you own 35% of a company, it isn't much harder to find investors holding a further 15% +1 share, giving you effective control of takeover decisions.

And while I understand that BA was brought reluctantly into this deal in the first place, and would rather have just left things the way they were, I have to think that BA won't be quite as stupid with Iberia as they were with SWISS (i.e., letting them fall into Lufthansa or AF/KL's hands). I simply can't concieve of a situation in which BA would allow a partner as strategically critical to BA's long-term ambitions as Iberia be taken by one of BA's largest and most vibrant competitors -- Lufthansa or AF-KL.

BA has to know that one way or another, at some point, they are going to have to draw a line in the sand: European consolidation is coming; it started with AF-KL and LH-LX, and it is going to happen whether Walsh likes it or not. Surely BA must see that if they let there only really serious partner in continental Europe slip into the hands of Lufthansa or AF-KL, they will be left completely out of the dance when the consolidation party really gets going over the next 5-10 years. From my perspective, that wouldn't seem like an attractive prospect if I were BA.
 
Skidmarque
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 7:59 am

Guys
I don't believe that the BA/TPG consortium has made a bid at all yet. The only bid is from TPG pre-BA involvement, BA themselves have clealy stated that they (as the consortium) are looking into making a bid, but it may still yet decide that they will not do so.

I think we are all talking about the TPG bid from a couple of weeks ago, if anything.

Cheers.
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EK413
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RE: Iberia Rejects BA Bid...

Sat May 26, 2007 12:37 pm

Quoting SKY1 (Reply 1):
....this affair is turnning a bit black.

It seems we have a repeat of the APA Qantas take-over bid... Iberian style  box 

Quoting Dme (Reply 7):
I suppose that IB share-holders want more than what BA/TPG is able/capable of giving. Another possible thing is that perhaps BA is trying that some other investors (APAX and either AF/KLM or LH) eye IB so that the IB price might increase and then BA can sell better the percentage it holds in IB.
Regards,
Dme.

Could it be the fact management and shareholders of IB know the company is worth more than what TPG are offering and after witnessing the APA Qantas takeover bid they know not to accept...  talktothehand 
Qantas shares closed yesterday at 5.67 a share...27 cents  twocents  above the bidders price... Hmm, very interesting considering the offer from APA was 5.45 a share...  scratchchin 

EK413
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GatoVolador
Posts: 140
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RE: Iberia Rejects BA Bid...

Sun May 27, 2007 12:34 am

Calm down, relax...

Nothing happened: they just postponed the decision related to allow BA and TPG to access some accounting figures and confidential information they needed to initiate the due diligence process, since Caja Madrid (10%), BBVA (+7%) and Logista (6%) are not interested in a 3,6€/share bid. (Actually, the current price of the stock is near the level of 4€, and firms as Ibersecurities valuated the firm, including their position in Amadeus and Clickair at the level of 4,5€/share.)

There is rumours regarding other groups being interested by Iberia. So the board is just waiting to see what happens. I think this makes sense: the goal of the managers of any firm is the maximization of the value. So... why accept a 3,6€ bid if they can give their shareholders more?

However, I honestly think TPG and BA just were playing with such a low offer. I'm sure they know others will show up and that they will have to increase the price offered, so that's why they started the game with a low price. I don't like TPG & BA plans for Iberia (TPG willing to leave in 5-6 years, and BA selling the very profitable units of handling, maintenance, as well as the new airline Clickair and Amadeus), but I think they will get IB for sure (if they show some interest).

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