LONDON (AFP) - Icelandair said it had bought an 8.4 percent stake in British low-cost carrier easyJet, describing the holding as a "long-term trade investment."
In a statement issued to the London Stock Exchange, Icelandair said it might buy further shares in the short term.
"We have a positive opinion of the easyJet business model and we think that the company has a bright future," Icelandair chairman Hannes Smarason said.
"Part of the company's investment policy includes making investments in sectors where the group has specialised knowledge.
"The Icelandair group is financially strong and the company is seeking ways to improve the return on its cash. We have therefore kept our eyes open for the opportunities in airline-related securities," he added.
EasyJet shares had earlier closed up 16 percent at 152 pence on rumours of takeover bid for the no-frills carrier.
The Guardian newspaper reported here Friday that three Icelandic airline companies -- Air Atlanta Icelandic, which owns British budget airline Excel Airways, plus Iceland Express and Icelandair -- were buying shares in easyJet.
