Iberia Gets Takeover Approach from Spanish Group

Iberia has received a takeover approach from Spain’s Gala Capital that values the airline at up to 3.7 billion euros ($5.4 billion), topping an earlier approach led by private equity group TPG.

Investment firm Gala, along with bank BBK, the chairman of Spanish airline Air Europa and Spanish billionaire Alicia Koplowitz, proposes to offer €3.6 to €3.9 a share for Europe’s fourth-largest airline, Iberia and Gala said on Thursday.

That would beat an earlier approach from US firm TPG, British Airways and three Spanish funds, which signaled their interest at €3.60 on March 30. One analyst said the new proposal could put off any other prospective bidders waiting in the wings.

Gala is the investment vehicle for some of Spain’s richest families, many of them worth billions of euros after investing in the country’s decade-long construction boom.

The firm said it expected to spend about four weeks going through the Spanish airline’s books and then would be in a position to present an offer “in a very short space of time.”

Gala’s move surprised analysts who had expected potential rivals to wait for a formal bid from TPG, even though their group has already taken many months longer than expected to bid as the global credit crunch is thought to have complicated financing.

Iberia holds a board meeting on November 22 at which the approach may be evaluated. The airline, which carried 27.8 million passengers last year, is attractive for its long-haul routes between Europe and Latin America and has boosted profits by cutting back on domestic routes where it faces cut-throat competition.