Spanish airline Iberia has reportedly hired investment banks Goldman Sachs and Morgan Stanley to advise it on a possible sale. (3/30/2007)
As per the information available, Iberia has become a prime takeover target following a new transatlantic air services pact that is expected to bring a consolidation of the European airline industry. Iberia said last week it would provide information to companies that approached it about possible tie-ups.
According to Reuters, Iberia’s share price has risen to all-time highs on speculation private equity firms or rival carriers were considering bids of up to 4 billion euros ($5.34 billion) for the Spanish flag carrier and its established long-haul business to Latin America.
Shares in the airline moved higher again on Thursday after several Spanish newspaper reports cited Lufthansa and British Airways as possible buyers. Iberia shares were up 0.5 percent at 3.9 euros.
“This is what currently supports the strong price, as our fundamental valuation for the Spanish airline and the recent surge in oil prices should point to lower levels,” Portuguese broker BPI reportedly said in a research note. “We believe that an offer price for Iberia could stand above four euros per share and could reach at least 4.4 euros per share in a fight-for-control situation.”
Its been also shared that private equity firm Texas Pacific Group was considering making an offer to buy Iberia. British Airways, which owns 10 percent of Iberia, also said it was keeping options open about the Madrid-based airline.
“We could see a number of potentially interested partners in Iberia,” Merrill Lynch analyst Samantha Gleave said in a research note. The bank also increased its price target on the stock to 4.3 euros from 3.5 euros.
“This could include other airlines and also private equity groups,” she reportedly said, naming British Airways, Lufthansa and Air France-KLM potentially being interested in the Spanish airline’s Latin American network.