Despite what a Spanish Newspaper is reporting, IAG is denying that it has no plans to re-engage Norwegian for a takeover bid. This news came just this past Friday after several speculative reports over the last year. In recent months, there has been some intermittent speculation that IAG would make a move to acquire the low-cost carrier.
The Spanish report
In the report by Okidario, sources familiar with the issue told the Spanish newspaper the following:
“It will be a takeover bid for 100% of Norwegian, conditional on obtaining at least 51% of the company,”Advertisement
The report gives some specifics on the issue, saying that within the next fifteen days, IAG will be launching the takeover bid for the Norwegian for approximately 1.1 billion euros – $1.23 billion USD. It also states that the deal is being advised by multinational investment bank JP Morgan.
Furthermore, the report says this bid is more likely because of the fact it will no longer have the opposition of the now retired former Norwegian president, Bjørn Kise.
However, in a subsequent Bloomberg report, IAG is saying that there is no longer interest in Norwegian Air. This is what IAG had to say in speaking with Bloomberg:
“We have said many times in the past few months that we are no longer interested in Norwegian Air…Nothing has changed.” -Laura Goodes, IAG spokeswoman
Apparently, IAG’s stock price rose as much 12% despite issuing the denial. IAG’s size and offerings would increase significantly if it were to acquire another airline – especially if it’s intention to buy up to 200 Boeing 737 MAX jets comes through.
Norwegian declined Bloomberg’s request for comment. The budget carrier has rejected two previous offers from IAG, accusing the airline group of undervaluing its business. The discount airline has become increasingly vulnerable in the midst of a cash crunch and mounting losses.
Norwegian has been the victim of some very unfortunate circumstances in the past year.
Most notable for the airline is the fact that they have 18 Boeing 737 MAX aircraft grounded and 92 future orders of the same aircraft type undeliverable.
Furthermore, Norwegian’s long-haul operations have had to adapt to the fact that its 787 Dreamliners have been severely affected by problems with their Rolls-Royce Trent 1000 engines. This includes having to lease multiple planes to cover the grounded aircraft.
Despite denials from IAG, it’s quite interesting just how much detail the Okidario report had regarding this rumored takeover bid. Perhaps there may be secret talks happening, but both parties are unable to disclose the news.
What do you think? Is there something happening behind the scenes that we don’t know about? Or is the report of yet another bid just fantasy and fiction? Let us know by leaving a comment!