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November 21, 2007 |
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BRITISH AIRWAYS: Iberia Receives Takeover Bid from Gala Capital Iberia Lineas Aereas de Espana SA, in which British Airways plc has a 10% stake, has received a letter from Carlos Tejera on Nov. 15, 2007, representing a consortium led by Gala Capital, which, in relation to the possibility of launching a takeover bid for 100% of the shares in the Spanish airline, requests access to company information related to tax, transactions, legal and accounting issues. The consortium mentions an indicative price of between EUR3.60 and EUR3.90 per share. The consortium would be comprised of Gala Capital, other Investment Funds advised by the former (Omega Capital and Inver- avante, among others), several regional savings banks led by BBK and Juan Jose Hidalgo. The indicative price does not constitute a binding offer nor does it imply that the consortium has reached any definitive decision with regard to launching the bid. According to the Daily Telegraph, BKK has not yet reached a formal agreement with Gala, while other backers tend to shy away from the consortium. The consortium, in its letter, calculates that the process involving additional analysis and valuation could be completed within approximately four weeks. The consortium's letter has been forwarded to the company directors. Meanwhile, sources close to BA told the paper that the British carrier is not threatened by the Spanish bids, although it is looking into the viability of the Gala consortium, which has yet to find an industry partner. As previously reported in the TCR-Europe on Nov. 16, 2007, BA and its private equity partner, Texas Pacific Group, are trying to obtain a EUR2.5 billion bridging loan despite turmoil in the credit markets as they attempt to push through a EUR3.60 per share (EUR3.4 billion) bid for Iberia. According to the Times, Citigroup, Royal Bank of Scotland, and Natixis are to underwrite the deal, which is expected to close before Christmas. A source revealed the consortium is close to making an offer, although it may not be no more than the indicative bid of EUR3.60 per share considering the price of oil and the state of the world economy. In May 2007 BA has joined with TPG Capital, Vista Capital, Inversiones Ibersuizas and Quercus Equity to investigate a possible consortium offer for the Spanish carrier. BA has ruled out further capital investment as part of any consortium offer. Headquartered in West Drayton, United Kingdom, British Airways Plc -- http://www.ba.com/ -- operates of international and domestic scheduled and charter air services for the carriage of passengers, freight and mail, and provides of ancillary services. The British Airways group consists of British Airways Plc and a number of subsidiary companies including in particular British Airways Holidays Ltd. and British Airways Travel Shops Ltd. BA has offices in India and Guatemala. * * * As reported on Aug. 16, 2007, Moody's Investors Service upgraded the senior unsecured rating of British Airways plc to Ba1, one notch lower than the Corporate Family Rating (upgraded to Baa3, stable outlook), reflecting the subordination of unsecured debt to a substantial portion of secured debt. The debt instruments affected by the rating action are: -- GBP100 million 10.875% senior unsecured notes due 2008 to Ba1 from Ba2; -- GBP250 million 7.25% senior unsecured notes due 2016 to Ba1 from Ba2; -- US$115 million 5.25% and US$85 million 7.625% senior unsecured industrial revenue notes due 2032 to Ba1 from Ba2; -- EUR300 million 6.75% perpetual guaranteed preferred securities to Ba2 from Ba3 issued by British Airways Finance (Jersey) L.P. |
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