FL in September went public with its dissatisfaction with AMR, calling on the company to take steps including spinning off its frequent-flier program in an effort to spark a stock price that is down more than 30% for the year. FL owned 8.5% of AMR at the time. The Reykjavik-based investor said Friday that it has cut its stake from 9.1% to 1.1% due to AMR’s lack of a response.
“While FL Group’s proposal received a positive reception from stakeholders, AMR’s management has not been able to take advantage, and, combined with the external factors of high fuel costs and a tightening of the U.S. economic environment, the AMR share price has continued to suffer,” the investor said in a statement.
The sale comes just days after AMR said it intends to divest its American Eagle regional subsidiary. Analysts estimate Eagle, which flies to more than 150 cities, could be worth about $800 million in a sale but might flounder in a spinoff due to its high costs and numerous competitors.
FL in its statement called the Eagle sale announcement “a move in the right direction,” but said the company’s “lack of clarity over timing, terms and valuation has done little to enhance value.”
The fund is no stranger to the airline industry, having once owned Icelandair hf and formerly holding a 16.9% stake in European discounter easyJet Airline Co. Ltd. In addition to its AMR stake, FL Group currently has a 23% stake in Finnair Oyj and a 32% stake in the travel group that owns Sterling Airlines A/S, a Scandinavian low-cost carrier. — Lou Whiteman
See FL's release announcing the sale
See TheDeal.com story on FL turning up pressure on AMR
See TheDeal.com story on AMR's decision to sell Eagle
See Dealscape post looking at American Eagle's prospects as a standalone
