International Airlines Group (IAG) announced (08-Nov-2012) Veloz Holdco SLU, a wholly-owned subsidiary of IAG, is to make a cash tender offer to buy 100% of the share capital of Vueling. The offer will be launched exclusively on Spanish stock markets. Veloz Holdco SLU has been created as an IAG subsidiary for the transaction. IAG’s subsidiary Iberia owns 45.85% of Vueling’s shares. The Iberia board has agreed not to tender them in the offer, meaning Iberia would retain its shareholding in Vueling, with IAG seeking to acquire the remaining 54.15%. The offer will be EUR7 per ordinary share, for a total cost of EUR113 million, funded using internal IAG resources. IAG plans to retain the current Vueling management team. IAG believes Vueling will benefit from the financial strength of a larger airline group, making it better able to compete with other airlines and invest in new customer products and services. The airline will also be able to generate some cost and revenue synergies as part of IAG mainly through joint financing and procurement. An application for authorisation of the offer, along with the prospectus and other legal documents, will be submitted within the next month to the Comisión Nacional del Mercardo de Valores (CNMV). Subject to authorisation from the CNMV, the offer will be launched to Vueling’s shareholders in 1Q2013 and, if accepted, the deal is expected to be completed in 2Q2013. The offer will be subject to a minimum acceptance condition of 90% of the voting rights of the Vueling shares not already owned by Iberia. It is not subject to regulatory approval by the European Commission. [more - original PR]
IAG: “With its leading position in Barcelona, European growth strategy and low cost base, Vueling has much to offer IAG. It has significantly increased capacity while remaining profitable, despite the Spanish economic slowdown, and already has extensive commercial arrangements with Iberia," Willie Walsh, CEO. Source: Company statement, 08-Nov-2012.