IAG clinches board backing for bid for budget carrier Vueling
10 April 2013 1:35am
THE BOARD of Spanish low-cost airline Vueling last night unanimously recommended IAG’s improved takeover offer of €9.25 (£7.89) per share, saying the new price gives the firm a “reasonable” value.
IAG, which already owns 45.85 per cent of Vueling as well as British Airways and Spanish airline Iberia, last month raised its bid by almost one third after the Barcelona-based carrier rejected a previous offer of €7 per share.
“The board of Vueling recommends shareholders to accept the improved offer for the following reasons: the price is reasonable and within the valuation issued by experts and from a strategic point of view the deeper integration of Vueling in IAG will offer advantages and opportunities,” Vueling said in a notice sent to the stock exchange regulator.
IAG, which is trying to lay off more than 3,000 workers and cut salaries at its Spanish airline Iberia to return the unit to profitability, could use Vueling to boost its short-haul business and compete with cheaper operators.
The dual-listed company in February posted annual losses of almost €1bn, as struggling Iberia wiped out growth seen at British Airways.
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