Norwegian’s boss Bjørn Kjos appears unfazed, but IAG’s move will make it harder for Norwegian to raise cash.
British Airways and Iberia parent International Airlines Group says it will no longer make offers to buy Norwegian and will sell the stake it bought last April in the budget carrier.
In April 2018, IAG announced that the purchase of a 4.61% shareholding was “intended to establish a position from which to initiate discussions” to buy Norwegian outright.
That has since dwindled to a 3.93% stake, while at the same time Norwegian has repeatedly rebuffed IAG’s attentions. Recently, Norwegian’s own troubles have come increasingly to light.
The British-Spanish aviation giant now says in a stock exchange announcement that it “confirms that it does not intend to make an offer for Norwegian Air Shuttle ASA (Norwegian) and that, in due course, it will be selling its 3.93 per cent shareholding in Norwegian.”
IAG’s announcement was noticed by Norwegian and its chairman Bjørn Kjos.
“We are aware of IAG’s desire to sell its shares in Norwegian Air Shuttle ASA. Norway’s plans and strategy remain unchanged. The company’s goal is to continue to build a sustainable business for the benefit of its customers, employees and shareholders,” Kjos commented.
Many small investors had apparently bought shares in Norwegian in the hope of a making quick buck from IAG’s attractive bids.
So since IAG’s most recent revelation there has been a substantial sell-off of Norwegian’s shares, negatively affecting the share price – plummeting more than 20% on the Oslo Stock Exchange by the end of Thursday.
Kjos did not want “to let his baby walk down the aisle for a sufficiently low-cost price at a time when [IAG boss Willie] Walsh’s British business is facing a very uncertain future courtesy of the no-deal Brexit our lunatic politicians are pushing us towards,” writes the UK newspaper the Independent.
Kjos may come to regret ‘no deal’ with IAG, the newspaper adds, as “he’s already had to slash costs, refinance planes, close routes and bases”.
IAG’s move will “keep Norwegian’s price low, and make it harder for Kjos to issue new shares to raise cash,” the Independent concludes.