Rumours fly in TPG-BA bid for Iberia

Various groups are reported to be interested in bidding for Iberia, although a source close to the TPG-BA bid claimed the Iberia board’s delaying tactics are unlikely to lead to another offer.

The TPGBA consortium bidding for Iberia may face competition for the airline, as two unnamed companies, one Swiss, the other British, were both tipped to enter the bidding alongside Lufthansa by Spanish news agency EFE.

Lufthansa may confirm its rival bid for BA in up to two weeks, while Apax Partners is also considering making a bid with the German airline or alongside KLM-Air France, the report said.

Iberia has still not opened its books to the TPG-BA consortium but it is currently considering doing so. A source close to the consortium’s bid said: “The Iberia board is desperately playing for time trying to get a bidding war going because the bid is well below the market price. Yet it’s unlikely they’ll get another offer because it is also a very full price for the company.”

An Iberia spokesman said: “There are many rumours but the only official approach has been made by the TPG-BA consortium.”

Lufthansa’s interest is also doubtful and its spokesman said: “Iberia operates in a very interesting market but it is definitely too expensive.”

The consortium is comprised of TPG, BA, Banco Santander’s buyout vehicle Vista Capital as wel as two other Spanish companies, Quercus and Ibersuizas. It is considering an offer of around €3.60 a share.

BA has already confirmed it will not increase its 10 percent stake, but it has a 26.5 percent first refusal on other shares in the company which would be used by the consortium.

The agency report also predicted the consortium would be comprised of a 39 percent stake for TPG and a 51 percent stake shared between the Spanish firms. The Banco Santander vehicle would probably take 20 to 30 percent. 

But a BA spokesman said: “It’s a back of the fag packet analysis. When we have access to Iberia’s records we will be able to say what the make-up of the consortium will be.”

To maintain Iberia’s Latin-American links it would be necessary for the bidder to have a 51 percent domestic stake, he added.   

UK newspaper The Times reported last week that 10 percent stakeholder Caja Madrid is set against selling its shares at the consortium’s price, which is a tenth of the firm’s current market price.