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3i and Barclays to team up for Go?

3i looks likely to be on the winning team for Go now that a rival bid has been rejected.

British Airways has rejected the joint bid submitted by Electra Partners and Barclays Private Equity for Go, the carrier's low-cost airline, the Financial Times reports.

It is understood that the joint bid was beaten by a higher bid from rival private equity group 3i. Both bids involve keeping on Go’s management.

Still in the running is Dutch national airline, KLM, which is believed to have put forward a conditional bid for the group but has also said that it is considering its options in the low-cost sector. KLM owns Go’s low-cost rival Buzz.

The newspaper suggests that Barclays may now team up with 3i to bid again for the airline. Electra was believed to have been unwilling to increase its bid because of competition with rival budget airlines such as Ryanair and Easyjet.

3i invested in CityFlyer Express in 1991, which operated as a BA franchise before being taken over by BA for £75m in late 1999. BA, which is being advised by Goldman Sachs, is hoping to raise up to £100m. However observers say it is more likely that the low-cost airline will change hands for £70m- £90m.