Iberia Bidding War Pending

Spanish based airline Iberia has today announced it has been subject to a second takeover bid in recent weeks after private equity group Gala Capital launched a $5.5 billion offer for the operator.

The offer from Gala Capital and a consortium of other Spanish equity groups valued the business of Iberia at $5.5 billion, in the second move of its kind for the airline over the last few weeks, which would see it bought out and ownership divided accordingly.

The Gala-bid values the company significantly beyond the $5.01 billion offer from equity firm Texas Pacific, despite the fact that the first bid was supported by British Airways which is currently an existing ordinary shareholder in Iberia.

Analysts have predicted that the new move for the company could spark something of a bidding war between the two rival parties, which could ultimately improve the position of the existing ordinary shareholders, including British Airways which are backing the Texas Pacific approach.

Iberia shares were up by 4% overall today in anticipation of an impending takeover approach, after Gala requested time to consider Iberia’s books. With Iberia working with in excess of 28 million passengers a year, their net assets to value ratio make for an attractive takeover prospect.

Iberia have a strong reputation in the European market, and are major players in Spanish air travel, and indeed throughout the European region. It is thought that any bidding war will take on a significantly competitive edge with several parties vying for the business.

It remains to be seen whether either party will receive shareholder backing, and indeed whether a competitive bidding environment will emerge in the wake of the initial Gala Capital bid.

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