According to Reuters, The U.S. private equity fund Certares which is backed by Air France-KLM and Delta Airlines Inc. has been chosen for exclusive talks on the take over of a majority in the stake of ITA Airways. The consortium defeated the bid presented by its rival, the Swiss shipping group MSC and the German airline Lufthansa for the stake to buy the control of the successor to Alitalia.
Reuters informs from three different sources that the winning consortium would “leave the Italian Treasury with a robust minority stake” with one of them mentioning “at least 40%”.
Certares, with European HQ in Milan had reportedly offered approximately 600 million Euros for a 60% share, nonetheless, sources also mention that the “valuation in the deal was considerably higher than that”. Furthermore, Fiumicino Airport in Rome was presented to be the center for the industrial plan for Certares.
Air France-KLM recognized the decision affirming that initially, it would be a “commercial and operational partner for Certares”
“Air France-KLM at this stage is not investing in ITA’s capital structure. However, Air France-KLM Group could consider in the medium term to take a minority stake in ITA,” reports Reuters from a company statement.
Reuters informs that both Air France and Delta had presented their intention in “entering ITA’s capital structure at a later stage, with different timing.”
Subsequently, other sources had informed that “MSC and Lufthansa had offered 850 million to 900 million euros for a larger 80% stake”.
Reuters reported that a Lufthansa spokesperson said: “We take note of the decision. We are still convinced our offer with MSC is the better solution,” including that Italy had chosen the option that retained greater state influence. Though, MSC declined to comment.
“This is surprising because MSC-Lufthansa was previously considered the preferred bidder,” said Johannes Braun from Stifel Research to Reuters.
“From an investor perspective (for Lufthansa), it’s a relief,” Johannes noted, mentioning concerns over predecessor Alitalia’s history of running up losses.
According to Reuters “Prime Minister Mario Draghi’s government is pressing on with attempts to strike a preliminary deal before a national election on Sept. 25. Lastly, The Brothers of Italy party, which is topping the polls, has called for the next administration to be allowed to make a final decision on ITA.”