MADRID – Airline Iberia said on Thursday it would bid for Spain’s second-biggest carrier, unlisted Spanair, which Scandinavia’s SAS put up for sale last year.
The Spanish flag carrier said it would make an offer with Spain’s Gestair, a privately owned leasing firm that rents planes and crew to Iberia among others.
Iberia, which is itself the subject of takeover speculation, did not say how much it would offer for Spanair, which made an operating loss last year.
Iberia made its move less than 24 hours after travel firm Marsans withdrew its bid for Spanair, a 65-plane carrier which is Iberia’s greatest rival on the route between Madrid and Barcelona, the world’s busiest.
“The board of Iberia has authorised the company to present SAS an offer, subject to the completion of certain conditions, in which, together with Gestair Group, it would buy 100 percent of the capital,” Iberia said in a stock exchange statement.
Air Nostrum, a regional unit of Iberia and another potential suitor for Spanair, said late on Thursday it would not make an offer for carrier, leaving the coast clear for its parent.
Amid a bitter price war in Spain’s domestic market, Spanair slipped from profitability in 2006 to an operating loss of 295 million Swedish crowns ($46.2 million) before non-recurring items last year.
Spanair has debts of around 10 billion Swedish crowns, according to investment bank ABN AMRO, which said in a note on Wednesday SAS would be “fortunate indeed if it can get a positive sum of money for Spanair”.
Iberia shares barely reacted to the bid announcement, which has been rumoured in the media for weeks. Iberia closed 0.42 percent lower at 2.38 euros, while SAS stock closed 3.27 percent lower.
Press reports last month said that Iberia had appointed Morgan Stanley to advise it on a bid for Spanair. An Iberia spokesman declined to comment on whether the investment bank was advising it, or on other details of the bid.
SAS said earlier this month the value of the Spanair unit had been hurt by global market turmoil, but that the sale would still go ahead, declining to give a value for the subsidiary.
SAS has said it hopes to close the sale in the second quarter of 2008, as part of its latest turnaround plan last June following years of losses.