British Airways owner considers Norwegian bid - BBC News

The annoying thing is; I was seriously going to have a punt on some Norwegian shares a couple of weeks ago. Just never got around to doing it! :ugh:

Would certainly be an interesting tie-up. Hypothetically speaking, if Norwegian did join IAG, would there be any need for LEVEL any more? anything they can do, Norwegian can probably do better.

If Norwegian did join IAG, it would be folded into other existing AOCs.
Level is an Iberia front company with former IB A332s flown with IB flight deck crew.
DI's LGW operation would easily fold into BA with certain synergies on both sides.
D8 would fold into BA or VY as appropriate.
Non UK DY long haul would be a fit for an expanded Level or wound up.

I wouldn't see the brand surviving.

They could just keep Norwegian for the Scandinavian ops.

Anyone else like me had the thought that this could be a fishing exercise to see just how bad the financials are at Norwegian? Obviously with any takeover bid IAG will be allowed full access to the books, warts and all.

RexBanner just what I was thinking...

DY is a good brand they may keep it

Have a look at the books.

Suggest it's not for them based on what they have seen without of course disclosing anything and then. .....walk away leaving a vacuumm and naturally the press to speculate who will then do the dirty work.

"Who me guv".

Would that put D8 crew at risk of redundancy or will IAG keep most of the NAS existing routes open, I wonder? After all, there is allegedly a pilot shortage. And if so, would the crew become BA staff?

Why BA staff? It would be IAG buying, and it would then depend on what they want to do with it - continue as a stand alone business, fold into their various airlines, etc

If they did they would thoroughly degrade it......

It could be possible they keep it and get rid of Vueling. Norwegian must have more brand recognition than Vueling Europe wide.

If any brand was to go it would have to be Level.

Agree- a good fishing exercise.
However, if IAG were to proceed then it could conceivably put Norwegian in command of the Gatwick base (low cost) & effectively close down BA Gatwick (Higher cost).
However, my guess it's to see what financial state DY is in. This will decide if it needs to buy or watch from the sidelines.

What makes you think IAG are in the business of trashing yields? BA beach routes out of Gatwick are highly profitable. Something that can not be said of Norwegian’s highly marginal business.

I haven't seen the books.

Could it be bought or the liabilities taken on very cheaply then dismembered/rolled into existing brands with perhaps a small operation retained as DY.

I'm remembering Dan-Air.

UK ops would end I suspect - can't see them wanted to dilute the existing brands

I don't know what it is, or if it's just me, but is Norwegian's brand that good? I always forget it exists when I'm booking flights, and it seems to be that the name of a country is only a good brand in relation to people flying to that particular country!

Not sure where you got that idea from.

A takeover target has to provide Zero to the company attempting to take it over.

Liabilities are mainly to large banks who are not in the slightest interested in selling cheaply to anybody.

Norwegian have to do zilch.

Perhaps people need to remember the Ryanair - Aer Lingus battle. What exactly were Ryanair able to see of Aer Lingus's accounts other than what was freely available ?

Answer was NOTHING.

Perhaps would be an idea to understand who are the shareholders first.....

Bjorn Kros owns 27%
Norwegian Finans Holdings own 16.4%
Folketrygdfondet (Norwegian Pension fund) own 10%.
DNB Asset Management AS (Norwegian asset management) own 6%

Norwegian Air Shuttle company : Shareholders, managers and business summary | Oslo Bors: NAS | 4-Traders

60% of the company i owned by Norwegians or those with major business in whole of Norway.

Unless Kros sells there is Zero deal as the rest will be led by him.

The Scandinavian operation will be of interest to IAG as that is one hole in their network as a whole, I would have thought that would remain branded as Norwegian. Anything else, who knows?!

As racedo says, a buyout is dependant upon Bjorn and the Norwegians - and as they have said there have been no discussed yet, its going to be a while before we hear anything. In the meantime, you could of course see some other airlines/airline groups also take an interest!

Wasn't IAG looking at buying into Finnair a year or so ago

Finnair is willing to sell itself to IAG but politicians in Finland do not like the idea

A takeover target doesn't *have* to show anyone anything; but if they are a willing target (Deutsche BA...) they will.

SNN-SWF going to 7x weekly from October, was originally supposed to be going from 2x to 4x

Having just returned from Austin, Norwegian comprehensively exceeded my expectations. A great product and staff that actually smile! All those Neo on order, access to Scandinavia, Gatwick slots and just importantly, pilots - no wonder IAG are looking at a possible take over!

Agree with you Buster, I was impressed when I flew with them to NYC.

https://www.ch-aviation.com/portal/n...s-also-at-risk

Delivery of two aircraft being delayed a month is quite a lame excuse for all this.

Yeah I agree. After all who cares for niceties like sustainability and profitability? After all it’s not as if they’re just keeping prices low to gain market share after which they wouldn’t dream of increasing them.

(Professor Frink’s sarcasm detector not needed).

The IAG move for Norwegian is interesting. Clearly IAG fancy wiping out a dangerous competitor, access to a large fleet of modern aircraft and trained crews. Norwegian also opens up a weak area for IAG - Scandinavia.

Unlike some posters I don’t see Norwegian being folded into BA/EI and Vueling. I think it is more likely to be run as an IAG brand, like Niki was planned to be. Norwegian rewards might be replaced by Avios and some functions brought onto the IAG platforms. The exception I could see is the LEVEL operations, I think they could well be folded into Norwegian and the LGW operations would surely be refocused to compete less directly with BA.

Unless Kros has indicated that he is willing to exit and sell there is no deal.

Gut feeling at the moment is there is no deal in the offinf and it is a speculative punt by IAG to test the water for a sale and prevent anybody else getting involved.

Bearing in mind Brexit and the fact that IAG will have its own issues because it cannot be more than 50% owned by non EU shareholders I don't see this going anywhere.

In the event that the Airline is for sale I very much doubt that IAG will be the only bidder as would fully expect LH and AF to be in there as well.

Possibly a TPG group bid as well with Ryanair having a share but that looks like a long shot.

He would be a fool not to take the last chance to get out before his house of cards collapses.

You seem to assume his shareholders which ultimately are the Norwegian State will not back him.

Remember Norwegian Wealth Fund is worth in excess of $1 trillion, taking 1% and investing in Norwegian and see what happens.

It was the industry-wide assumption about the ME3 too, even a year ago and then... I guess Norwegian state funds need to apply due diligence as well therefore the pocket is deep but not without limits.

He's not on the hook for any liabilities, so if it's as bad as the naysayers insist why not just ride it down to the crash? It never did any CEO any career-damage and it's not like he's desperate for one more krone to pay his mortgage.

Of course it might be that Mr Kros has slightly more information on the actual financial state of his companies...

Norwegian Oil fund is worth 40% (and that was 6 months ago) of the size of whole UK economy.

Norway is allowed take $3 Billion a year from that as cash.

It could buy IAG in its Investment portfolio and it would seen as a minor investment.

I don't see Norwegian offering anything to IAG as a brand.

It does however offer significant competition to it across the Atlantic hence a need to snuff out the competition so price and yields TA can rise.

IAG requires BA to be fed at Heathrow for its TA service, Norwegian is offering customers a distinct choice and they are taking it.

The size of the Norwegian Sovereign Oil fund is irrelevant, they cannot cash it in tomorrow and it is not comparable to the size of the UK economy.

Who is to say that the find would actually want to invest in Norwegian? Throwing money around to support struggling companies is not something that investment funds do unless they can see a financial return, a proper business plan and a management team that can pull it off. I don't remember many political investments by the Norwegian Oil fund but I maybe wrong.

On the other hand, IAG can see clear synergies, it has a track record of running a financially successful airline and can also offer Kros an exit with the promise that the brand he has established will be preserved within the IAG stable.

They can do what they like with it including cashing it in were they to choose.

Its size is very relevant because they can invest when and where they like and have already invested in Norwegian.

As for its size ................ being 40% of the size of UK economy is big, considering Norwegian whole economy is only 16% of its size.

Well they already have which blows that theory out the window.
Companies in high growth phases are not cash cows, they require huse levels of investment to invest for growth.

IAG see getting Norwegian off the TA market and screwing their yields as the win here.

BA has a history of being involved in practices like this.................. Laker and Virgin spring easily to mind.

It is a sovereign wealth fund - by nature it is a long term investment fund.

It is not an Arabic wealth fund, EU state aid rules still apply. Just because they already own 10% doesn't give them a free hand to up their stake. In any event, the fund still has to believe that they will get a return on it.

I was not disputing it's size, I was saying that you can't compare funds with GDP. They are not apples and apples. UK pension fund values are well in excess of the UK's GDP.

Yes, I agree although there are lot of other reasons (IAG would also get access to a fairly new fleet, a load of pilots and the Scandinavian market). But if Kros does want to retire, IAG has the infrastructure in place to take over the business. Financial investors do not have that.

Do EU state aid rules apply in Norway?

As far as I am aware yes, they are not in the EU as such but have to abide by EU rules but have no say regarding laws, free movement etc. There are also in Schenghen.