Alitalia Shares Climb on Possible Buyout AND SO DO AKH SHARES!
Tuesday January 30, 12:59 pm ET
By Alessandra Rizzo, Associated Press Writer
Alitalia Shares Rise 3.56 Percent After 11 Potential Buyers Express Interest in Company
ROME (AP) -- Alitalia SpA shares rose and the government expressed optimism over the future of the money-losing Italian airline Tuesday after 11 potential buyers said they were interested in possibly acquiring the company.
The carrier's shares rose 3.56 percent to close at euro1.134 (US$1.47) at the Milan stock exchange.
Premier Romano Prodi said he was "satisfied" with the number of potential bidders, while Economy Minister Tommaso Padoa-Schioppa said he felt very "encouraged and confident" over Alitalia's prospects.
"We chose the right path when we decided Alitalia had to be sold," Padoa-Schioppa said, speaking from Brussels.
The government, which controls a 49.9 percent share of Alitalia, announced last month conditions for the sale of at least a 30.1 percent share to a buyer with a turnaround plan.
The 11 private investors that have expressed an interest include U.S. private equity fund Texas Pacific Group; AP Holding SpA, led by Carlo Toto, the chairman of rival carrier Air One; Italian banking group UniCredit SpA; and Carlo De Benedetti's private equity fund Management & Capitali.
Giulio Gallazzi, chief executive of one of the bidders, Net Present Value, said Tuesday his company has euro3 billion (US$3.89 billion) to bid for Alitalia.
Air France-KLM was not on the list, made public by the Italian Economy Minister after the deadline for presenting the expressions of interest expired Monday afternoon. Speculation had mounted over the past weeks that the world's largest airline by revenue might submit a letter of interest.
But the company said in a statement issued late Monday that it would not participate because unspecified "required conditions are not met." It said, however, it intended to "pursue and develop its partnership with Alitalia."
Alitalia and Air France-KLM are part of the SkyTeam global alliance of air carriers and have a code-sharing agreement for certain routes. Air France-KLM said in November it was in exploratory talks with Alitalia, but has insisted the Italian airline improve its finances before it would consider a partnership.
Transport Minister Alessandro Bianchi said he was not surprised that Air France-KLM was not among the bidders.
"At this stage, it seems to me that the decision to be on the sidelines is the wisest one for them. They are waiting to see what happens," Bianchi said in an interview published Monday by La Stampa.
Bianchi said the government wanted the first phase of the Alitalia tender offer to focus on financial and industrial plans, while later the aim would be on possible alliances. He said it would be several months before Alitalia would actually change hands, and that he was ready to stop the privatization if he realized the bidders were only interested in speculating.
The government has said buyers must have minimum capital of euro100 million (US$132 million) and must continue employing Alitalia's 18,000 workers, keep the national routes and maintain the carrier's Italian identity.
The offer drew more potential bidders than expected. But Bianchi said the list would be thinned down in the next phase and already ruled out from the competition at least one of bidders: Fabio Scaccia, a teacher who told the ANSA news agency he doesn't have the money and launched the bid just to be provocative.
Alitalia has been struggling for years.
The airline said it expects operating losses of about euro380 million (US$490 million) for fiscal year 2006, the result of strong competition in the market from low-cost airlines, higher fuel costs and lower revenues due to strikes by employees that grounded flights.
A four-hour strike Tuesday by Italy's air traffic controllers caused further disruption to Alitalia's flights, forcing cancellations and delays at airports across the country, reports said.
The Italian air traffic agency ENAV apologized to passengers and said 28 percent of controllers took part in the strike. |
