Norwegian Air rejects two separate approaches from IAG

Nordic carrier says IAG bid unvalues group and its prospects

 

Norwegian Air confirmed on Friday that it has received and rejected two separate takeover proposals from Aer Lingus-owner IAG.

The board of the Nordic carrier said the proposals by IAG to acquire 100 per cent of its share capital were “unanimously rejected on the basis that they undervalued it and its prospects.”

IAG announced last month that it had acquired a 4.6 percent stake in the airline as a platform for starting talks for a full offer, in a deal that could expand IAG’s budget offerings and give it control of a struggling rival.

IAG also said it had been unable to reach agreement on a possible takeover offer for Norwegian after holding talks with the struggling airline’s board, putting a dampener for now on M&A in the European airline market. “IAG is currently considering its options in relation to Norwegian,” IAG said in slides for a presentation on Friday. It bought a 4.6 per cent stake in Norwegian in April with a view to starting takeover discussions.

Releasing first quarter results on Friday, IAG stuck to a forecast for annual profit growth after announcing a 75 per cent jump in quarterly profit, in results that showed it was striding ahead of rival Air France-KLM.

The jump in quarterly profit was boosted by favourable currency moves, plus higher ticket prices and better sales, helped by strong demand on its lucrative trans-Atlantic routes, and after its costs excluding fuel fell.

Since the start of the year shares in Norwegian Air are more than 50 per cent, mostly thanks to IAG’s interest in the company. It now has a market capitalisation of around 13 billion Norwegian crowns (€1.3 billion).