UPDATE: Iberia Top Holder: Deal With BA Can Close Soon
February 02 2009 - 10:45AM
Dow Jones News
British Airways PLC (BAY.LN) and Iberia Lineas Aereas De Espana
SA (IBLA.MC) are close to a final agreement over the planned merger
of the two airlines that may give Iberia a bigger piece of the
company than initially expected, a top Iberia shareholder said
Monday.
"At Iberia's board meeting last week, we concluded that a deal
is close," said Miguel Blesa, chairman of Caja Madrid, Iberia's
main shareholder. "I think we have all the data we need to make a
decision," Blesa told a reporters at a press conference to present
results. The unlisted Madrid-based savings bank owns 23% of
Iberia.
At 1503 GMT, Iberia shares were up EUR0.06, or 3.3%, to EUR1.87.
British Airways was down 2 pence, or 1.8%, to 118 pence.
Blesa, who is also vice chairman of Iberia, said he thought that
Iberia's share in the resulting company could be closer to 45% than
to 40%.
"Frankly, I don't think that we're talking about (a swap
formula) of 60% (for BA's shareholders) to 40% (for Iberia's
owners)," he said, noting that Iberia's market capitalization is
now bigger than that of its U.K. peer.
Blesa also said the airlines are basically in agreement on
splitting the board 50-50 between them, while they have yet to
decide on a headquarters for the combined company.
"We haven't said headquarters should be in Madrid, but British
has said that it would like it to be in London," Blesa said. Blesa
said he wished for an agreement that would put the legal and fiscal
headquarters in one country, and the operating headquarters in the
other country.
The two carriers revealed a GBP3.16 billion all-share merger in
July, with tie-up terms still to be set.
However, BA's GBP1.74 billion pension-fund deficit and its
recent share-price drop have made an agreement on the fine print of
the deal more complicated than initially expected.
Iberia has no debt and EUR2.25 billion in cash - a position that
could allow it to leverage a larger stake in the merged entity.
Company Web site: www.cajamadrid.es
-By Christopher Bjork, Dow Jones Newswires; 34 91 395 81 23;
christopher.bjork@dowjones.com
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