More media reports (unlinkable):
Headline : British Airways union disputes BA's claim that negotiations have concluded; BA denies approaching Goldman Sachs regarding potential takeover defence
Main body : British Airways (BA), the UK-listed airline, claimed to have reached agreement with unions over its pension deficit, although unions disputed the claim, The Times reported. BA said yesterday (8 January) that it had 'concluded' talks regarding its GBP 2.1bn (EUR 3.1bn) pension scheme deficit, the report said.
Balpa, the union representing BA pilots, said in the report that BA's assertion that it had reached agreement with unions was 'totally untrue.' Discussions between BA and BA Forum, an employee organisation comprising representatives of Balpa and the Transport & General Workers Union and Amicus, ended Friday (5 January), the report noted.
A Financial Times report detailed BA's announcement yesterday, in which the company said that it had agreed an increase in its contributions to the scheme in exchange for agreement on measures to eliminate the deficit over the next decade. The item also noted that some union officials said BA's statement was premature.
The Financial Times report quoted GMB union representative, Gary Pearce, who said in an AFX report that BA's final offer would be presented at a union meeting on Friday (12 January). The union would decide whether to back the agreement at the meeting on Friday, Pearce added.
Separately, a Daily Telegraph report quoted BA chief financial officer Keith Williams, who downplayed talks that the company might now be in play for a takeover after reaching agreement on the pension scheme. Williams also denied market speculation that the group had sounded out Goldman Sachs regarding the US-based investment bank joining its advisory team of Merrill Lynch and UBS in anticipation of mounting a bid defence.
A separate report in the Financial Times carried analysts' mixed opinions regarding the potential for a takeover bid for BA. An analyst at Collins Stewart yesterday tipped BA as a likely bid target, citing its agreement on the pension scheme. Based on valuation multiples being applied to Qantas, the Australian airline, the analyst mooted an 800p per share take-out price for BA.
Other analysts quoted in the Financial Times report and the Daily Telegraph report were dismissive of the prospects of a bid for BA. Both reports quoted an analyst at JPMorgan, who said yesterday that BA cannot be compared to Qantas, which is at an earlier stage in the profits curve than BA, which is reaching a peak in its profit cycle. Therefore, there is less chance for upside with BA, the analyst explained. British Airways' market capitalisation stands at GBP 6.25bn (EUR 9.31bn).
Source : The Times (London), Financial Times, Daily Telegraph