Lufthansa Floats Norwegian Air Purchase

Monday, June 18th, the most active stock on the Oslo Stock Exchange was by far Norwegian Air Shuttle NAS with news of a potential take-over bid.

With an eye on expanding future European air travel, Lufthansa has shown formal interest in acquiring Norwegian Air Shuttle; the Nordic airline that lately declined 2 bids offered from British Airways owner IAG.

A NEW WAVE

German airline’s CEO Carsten Spohr spoke Monday in an interview with the German daily newspaper The Süddeutsche Zeitung (and as further reported in Næringslivsavisen NA24 – a Norwegian online business newspaper), “There’s a new wave of consolidation in the airline industry. That means that we’re also in contact with Norwegian Air Shuttle.’ –

CEO Spohr also said that the parameters of price, the ‘strategic added value’ that the purchase of Norwegian Air would bring to Lufthansa, and the potential legislative restrictions facing the German airline in making the acquisition would all impact the potential outcome of any proposed scheme.

REJECTED BIDS

April 2018 saw IAG purchase a 4.6% stake in Norwegian Air and announce an interest in presenting a formal tender for purchasing the entire Nordic airline.

Since then, Norwegian Air has rejected two potential take-over bids from IAG. Norwegian Air Shuttle founder and Bjorn Kjos has stated that he’s not opposed to doing a deal on the right terms.

‘COMPLETELY UNEXPECTED’

Kios spoke with NRK, saying “I know that they (Lufthansa) have been in talks with the advisers we have. I’ve spoken with Carsten Spohr of Lufthansa myself,he’s a very nice guy. I have texted with him, so I know they’ve been in contact.”

CEO Kjos holds a controlling block of stock and said that interest in Norwegian Air is a good sign that they’re doing something right. He labeled IAG’s initial acquisition inquiries as “completely unexpected” since “we haven’t advertised anything being for sale, but as a result of IAG’s interest, others have initiated bid inquiries”, noting that “Lufthansa is one of them.”

Kjos told NRK that he thinks it’s “too early” for investors to sell off Norwegian Air stock.“Norwegian has so much exciting ahead of it, but that’s my opinion.”

DENIES BIDDING WAR

Last week, IAG’s chief Willie Walsh reported to shareholders that both he and his team were still “open-minded” about purchasing Norwegian Air, but denied any potential of a bidding war with Lufthansa.

Concurrently last week, Lufthansa sent a team of consultants to Norway to examine the viability of acquiring Norwegian Air.

Norwegian Air Shuttle is the third largest low cost carrier in Europe with more than 33 million customers annually and 150 aircraft; employing about 10,000 people.

The company has about 220 undelivered aircraft on firm order.

At post: OSEAX Norwegian Air Shuttle NAS closing price: NOK 274.00: up 10.13%

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