According to the Spanish newspaper Okdiario, IAG International Airlines Group is in a bidding mood to acquire Norwegian Air again. IAG is the Spanish-British corporation behind British Airways.
The corporation is planning on placing another bid for 1.1 billion Euros for the valuable Norwegian airline. In U.S. Dollars that amounts to about 1.24 billion.
The move is expected to take place within the next couple of weeks. If it happens it should stir up some reactions within the airline industry.
IAG’s bidding intent for Norwegian is for twice the market value of the airline!
IAG has made a move on Norwegian before. Spain-based IAG previously put in two low-ball bid offers for Norwegian. Will they succeed this time?
This time around IAG is ready to up the ante by offering a staggering two times the market value of Norwegian Air!
Norwegian Air is clearly a very attractive investment target in the airline industry. And there is no wonder why. Norwegian boss Bjørn Kjos and his partners have built a very popular low-cost budget airline from scratch jettisoned into a giant force to be reckoned with in the airline world.
When asked about the planned move Okidario is citing anonymous sources. Neither Norwegian or IAG have any comments.
Will Norwegian Air accept the acquisition offer?
Newspaper Okdiario states that major Norwegian stockholder Bjørn Kise won’t oppose IAG’s offer this time.
Both Mr. Kise and his business partner Mr. Kjos recommended a sale of Norwegian in the previous bidding attempt by IAG. The Board of Directors disagreed.
But that’s not all.
In May the Spanish newspaper Expansion reported that Norwegian was getting into position to receive possible bids from not only IAG but the German Lufthansa as well. Norwegian did not comment.
Financing the purchase
JP Morgan was retained in April to help secure the 4 billion Euros (4.97 billion US Dollars) needed for the funding of Norwegian. This according to Expansion.
1.5 billion Euros will secure Norwegian’s stocks. Then, another 2.32 billion Euros would be raised to refinance Norwegian’s large debt portfolio.
Norwegian Air’s June performance
Norwegian’s stock prices increased by 9.57 percent to 40.87 NKR (Norwegian Kroner) (about 4.79 USD) after Norwegian Air reported good performance statistics for June. They carried 3.47 million passengers in June. This was still 21,948 passengers less than June last year.
IAG’s previous interest in bidding for Norwegian Air
The first time IAG International Airlines Group set their sight on Norwegian was in April of 2018. They purchased a large number of Norwegian shares and then attempted a takeover bid.
IAG previously dumped their stocks in Norwegian. But that came after a statement concluding they were no longer interested in bidding for the airline. This happened in January of 2019.
The news on IAG’s move caused Norwegian’s stock to take a 22 percent dive at the time.
The trend between Spanish newspaper reporting and IAG
This is not the first time that a Spanish paper claims breaking “insider” news in regards to IAG.
For example, Expansion previously reported that IAG would bid for Norwegian by offering 330 Norwegian Kroner ($38.67 USD) a share, something that did not materialize.
Featured Image Credit: Norwegian Air.