If the markets don't want to play along, British Airways plc captain Willie Walsh would just rather take his airline and go home. The executive this weekend said the current market caps of his company and takeover target Iberia Líneas Aéreas de España SA indicate that a merger would give Iberia just over 50% of the combined group and BA investors just under 50%. Walsh told the Financial Times on Friday, such an arrangement would be unacceptable to BA's owners and that he felt under no pressure to make the deal work.
Continue reading below
When the two first began talking last year, a share swap would have given BA 65% of the combined group and Iberia the remainder, the paper said. But BA's share price has been hammered by concerns about the airline industry in general and the weak pound, which is now close to parity with the euro and the equivalent if just $1.40. On Monday, BA was valued at about £1.69 billion ($2.3 billion) while Iberia had a market cap of £1.68 billion. Still, stalled takeover talks wouldn't reflect well on Walsh's ability to pilot the airline through similar problems that grounded a proposed combination of BA and Australia's Qantas Airways Ltd. last year.
-
Andrew Bulkeley
