Don't know if it is good news or what, but here's the latest from the FT about the GO saga.
COMPANIES & FINANCE UK: KLM snubbed as BA holds Go talks with 3i TRANSPORT UK VENTURE CAPITAL GROUP BELIEVED TO HAVE BID Pounds 100M FOR LOW COST CARRIER:
Financial Times; Mar 14, 2001
By KATHARINE CAMPBELL and KEVIN DONE
British Airways has entered into exclusive negotiations with 3i, the UK venture capital and private equity group, for the sale of Go, its low cost subsidiary.
It is understood that the bid from 3i values Go at around Pounds 100m.
3i has previously been involved in the airline sector with its highly successful investment in 1991 in CityFlyer Express, which operated as a BA franchisee and was taken over by BA for Pounds 75m in late 1999.
BA's decision to grant exclusivity to 3i is a blow to KLM, the Dutch national airline, which submitted a conditional offer two weeks ago aimed at merging Go with Buzz, its own low cost subsidiary. A BA deal with 3i would raise questions over the future of Buzz, which operates from London Stansted airport in direct competition with Go and Ryanair.
KLM has been reviewing its engagement in the highly competitive but fast growing low cost sector in the face of continuing losses at Buzz. It said recently that it could well be forced to pull out of the business if it failed in its bid to merge the operation with Go. KLM believes Buzz is too small to achieve the scale needed to compete with the likes of Ryanair and EasyJet, the leading low cost carriers in Europe, through organic growth.
Buzz, which started flying 15 months ago, has a fleet of 10 aircraft and a network of 18 destinations in its summer schedule.
Separately KLM launched another low cost experiment in December with the start of Basiq Air, a no-frills service offered by Transavia, its charter airline subsidiary, on a small number of routes out of Amsterdam.
KLM's approach to BA was made jointly with Carlyle group, the US private equity firm, which was seeking to add a stake in Go to the growing portfolio of its European fund. The negotiations with KLM and Carlyle foundered partly on the valuation of Go, but also on BA concerns about the complexity of the KLM proposals.
BA is seeking to complete the sale of Go by the end of this month as part of its efforts to reorganise its fragmented and loss-making shorthaul operations in Europe.
It is understood that BA feared that KLM's proposed merger of Go and Buzz could run into problems with the competition authorities. The deal could also have faced the issue of foreign control and ownership depending on the size of Carlyle's stake. Under European Union regulations non-EU entities are not allowed to own more than 49 per cent of an EU airline.
The Dutch flag carrier was the only airline remaining on the shortlist of potential buyers for Go, which BA put up for sale last November.
BA is being advised by Goldman Sachs.
Copyright: The Financial Times Limited