IAG is considering a third and final approach to bid for Norwegian, according to press reports.
British Airways and Iberia owner IAG is considering a third and final approach for Norwegian, according to the Spanish newspaper Expansion and commented on by the Financial Times.
IAG aims to make a new offer of €1.52 billion following two previous attempts. Expansion cites unnamed sources as saying that IAG has drawn up a proposal that values loss-making Norwegian at 32% more than its previous share price.
This would be a complete reversal of IAG’s statements on Friday that it was not going to announce a new offer for Norwegian in the near future. IAG chief executive Willie Walsh said then that he would not make a hostile bid as it was not his style.
Two weeks ago, Norwegian rejected two separate takeover proposals from IAG – which like Norwegian has not commented on the Expansion allegations. The Nordic carrier claimed the two proposals undervalued its business.
At the time, Walsh denied the company had made a formal offer to Norwegian, saying: “We have had contact with their board which has not been successful and we’re now reviewing all our options.”
IAG took a 4.6% stake in Norwegian last month, boosting Norwegian’s share price. But they dived by 10.5% when news broke about the double rejection. Norwegian claims that IAG’s interest has stimulated interest from other parties.
The Financial Times quotes analysts at Bernstein as saying that the chances of a financially astute deal now are low.
“The defiant rejection by Norwegian suggests the intersection between what a rational IAG will pay for a heavily loss-making airline, and what the Norwegian board considers acceptable, is very small (or likely non-existent),” the investment research firm says.