Alitalia conditionally accepts joint bid by Air France and KLM
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Sunday, March 16, 2008
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Italian state-owned flag carrier Alitalia's board has conditionally accepted a low-value takeover bid by Air France-KLM, a company formed by the merger of Air France and KLM.
Alitalia say the offer requires various conditions to be met by March 31 if it is to succeed. A board meeting, which ended unanimously, started mid-Saturday and continued until early Sunday, at which point a press release was issued. This named key conditions as approval by the trade union, agreement from the government - which must also supply a credit line repayable after a credit hike - and "elimination" of risks from a suit by Milan airport operator SEA. The government owns a 49.9% controlling stake.
Further conditions include receiving a government commitment to keep the airline's landing rights, agreeing with Rome International Airport's operator over servicing and a deal to buy back some activities at Alitalia Servizi, a maintenance arm.
Air France-KLM, who placed their bid on Friday after negotiations lasting eight weeks, welcomed the decision in Paris. The deal values at Alitalia at €0.10, compared to a Friday trading value of €0.53, and will swap one Air France-KLM for every 160 Alitalia shares, valuing the airline at €140 million (US$240 million). The low price comes as a result of financial difficulties that the airline is currently facing. Initial rumours suggested the price would be €0.35 a share.
Also being bid on is 100% of convertible bonds at €0.3145 a bond. The state owns 62% of these. The company will keep its brand, logo and Italian headquarters.
Sources
- "Alitalia board approves Air France-KLM takeover deal" – AFP, March 16, 2008
- "Alitalia accepts Air France bid, says offer valid if conditions met by March 31" – Forbes, March 16, 2008
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