Lufthansa bids for Austrian Airlines, but deal in doubtOctober 23rd, 2008 - 11:22 pm ICT by IANS
Vienna, Oct 23 (DPA) German airline Deutsche Lufthansa AG has submitted a valid bid for Austrian Airlines AG (AUA), the country’s takeover watchdog confirmed Thursday, but it said it was still uncertain if there would be a deal.The Austrian government holding OeIAG is in the process of selling its 42.75 percent stake in the country’s ailing flag carrier.
“Against the background of AUA’s economic development and an apparent wide gap between the negotiating positions, it is uncertain whether the transaction can be concluded,” the Austrian Takeover Commission said in a statement.
Air France dropped out of the bidding process Tuesday, and the commission’s statement did not make any mention that the third suitor, the Russian carrier S7 Airlines, had submitted a valid offer by the deadline on Tuesday.
The German carrier has time until Friday to make a final price proposal.
On Monday, the OeIAG holding is set to consider the offer.
According to analysts, Lufthansa is unlikely to pay the 5 euros or 7 euros ($6.44-9) per share reported in Austrian media, given that the takeover candidate has debts worth 800 million euros.
The takeover commission made its statement after having told the Vienna stock exchange Thursday morning to stop trading in Austrian Airlines shares, which had lost 30.2 percent of their value Wednesday.
In the first half-hour after trading resumed in the afternoon, shares rose to 3.07 euros, a gain of 7.7 percent.
Because of the free-fall in the shares Thursday, Lufthansa would have been obliged under Austrian takeover rules to inform the authorities of its bid already on Wednesday, commission head Stefan Arnold said.
Last week, the management of Austrian Airlines issued a warning that the company would end the year with a deficit of 125 million euros ($168 million), mainly as a result of high fuel costs.