Vueling’s Board rejects British Airways and Iberia’s takeover offer
The Board of Directors of the Catalan airline Vueling has rejected the offer of 7 euros per share made by IAG, the group which resulted from the merger of British Airways and Iberia. Vueling’s Board considered the price to be too low. IAG’s takeover was offering a 27.97% bonus in November, but Vueling’s shares have significantly increased their value since then and IAG has not improved its offer. The Catalan company is one of the few European airlines to turn a profit over these last few years. Now Vueling shareholders will have the last word on the decision as to whether they accept IAG’s offer.
Barcelona (ACN).- The Board of Directors of the Catalan airline Vueling announced on Friday that it had rejected the offer of 7 euros per share made by IAG, the group which resulted from the merger of British Airways and Iberia. Vueling’s Board considered the price to be too low and now the Catalan company shareholders will have the last word on the decision as to whether they accept IAG’s offer. The Board has recommended that the shareholders also turn down the takeover offer. The giant international airline was offering a 27.97% bonus in November, but Vueling’s shares have significantly increased their value since then and IAG has not improved its offer. Furthemore, the Catalan company is one of the few European airlines to turn a profit over these last few years. Iberia already owns 45.85% of Vueling and IAG presented an offer for the remaining 54.15% of the company’s shares (16,193,297 shares).
Vueling’s Board of Directors sent its decision to the Spanish Stock Market Authority (CNMV) on Friday. Those who voted against the offer were Vueling’s President, Josep Piqué (who owns 40,000 shares), the airline CEO, Àlex Cruz (5,000 shares) and the Board Members Enrique Donaire (13,483 shares), Isabel Martín (10 shares), Carles Colomer (10 shares) and Jaime Manuel de Castro (2 shares). The Board Members Jorge Pont, José María Fariza, Manuel López and Daniel Villalba have abstained, since they were in a conflict of interest. Fariza, López and Pont represent Iberia’s interests on the Board.
Vueling’s Board considered that, despite the fact that the Barcelona-based airline’s integration within IAG “should bring interesting advantages and opportunities for the company”, they recommend that the shareholders, who will have the last word, turn down the offer. The acceptation deadline began on the 1st of March and is scheduled to end on the 8th of April. However, IAG could extend for 70 more days.
The Catalan company’s Board has gathered advice from N+1 and BBVA regarding IAG’s offer. N+1 issued a report on the 5th of March which concluded that €7 per share “is below the reasonable valuation range”. The BBVA report, from the 7th of March, stated that “from a financial point of view, the offer is not equitable for Vueling’s shareholders”.
On the 8th of November, IAG presented a public takeover offer on the 54.15% of Vueling’s capital, in order to buy the remaining 16,193,297 shares and control 100% of the airline. Iberia, which is one of the two airlines behind IAG, with British Airways, already owns 45.85% of the Catalan company. Back then, the €7 per share offer represented a 27.97% bonus.