Mooney
14th May 2001, 00:02
Cassani flies off with Go in £100m buyout
From; http://www.sunday-times.co.uk/
BARBARA CASSANI will lead a management buyout of Go, the low-cost airline, in a deal to be announced this week.
The buyout from British Airways is being part-financed by 3i, the venture capitalist, and is expected to value Go at just under £100m.
Negotiations are in their final stages and the buyout is likely to be announced by Friday. A source close to the deal has confirmed that Cassani, the chief executive of Go, will lead the airline's management team.
Cassani, 40, was appointed to run Go three years ago by BA's former chief executive, Bob Ayling, after she convinced him that there was a market for a low-cost airline operating out of Stansted.
Observers believe that Cassani, who joined BA in 1987, is the driving force behind Go's success. Although the airline has not yet made a profit, it is expected to go into the black this year.
Cassani's success with the management buyout has come despite the fact that she was once reprimanded by BA bosses for suggesting that Go could operate independently.
Cassani, who is from Boston, Massachusetts, and who is the world's only female airline boss, came to the attention of BA after her involvement in the buying and restructuring of the troubled DanAir in 1992. Her chances of leading a buyout were strengthened when 3i beat off competition to buy the low-cost airline.
Other interested parties, such as KLM, had also made bids for the business. The Dutch carrier, however, was not selected as a preferred bidder because of concerns that it had plans to merge Go with Buzz, its own low-cost carrier - a move that could run into competition problems.
Any tie-up with Buzz is now thought to be unlikely. A source close to the deal said: "Apart from the fact that they are low-cost carriers, they are very different businesses. A merger is unlikely, although I would never say never."
Although most private-equity businesses aim to make an exit from their investment within three to five years, 3i is understood to have no such plans. Sources say a decision has not been made as to whether the company will float or sell the business.
Barclays Private Equity recently joined 3i in its bid for the airline, strengthening its chances of success. It had originally put forward an offer of £90m with the private-equity group Electra Partners, but it is believed that the bid was considered to be too low.
Both Barclays and 3i have already had some involvement in the airline sector. Barclays had invested in Luton Airport, and 3i backed the start-up City Flyer Express in the late 1980s, turning it into a BA franchisee and selling it to BA two years ago for £75m.
BA had hoped that the sale of Go would fetch up to £300m. But enthusiasm among potential buyers soon waned, with the Hinduja brothers, Easyjet and Iberia, the Spanish carrier, all quitting the race. Easyjet, the Luton-based airline, is believed to have offered BA about £200m in shares, but its approach was rebuffed.
From; http://www.sunday-times.co.uk/
BARBARA CASSANI will lead a management buyout of Go, the low-cost airline, in a deal to be announced this week.
The buyout from British Airways is being part-financed by 3i, the venture capitalist, and is expected to value Go at just under £100m.
Negotiations are in their final stages and the buyout is likely to be announced by Friday. A source close to the deal has confirmed that Cassani, the chief executive of Go, will lead the airline's management team.
Cassani, 40, was appointed to run Go three years ago by BA's former chief executive, Bob Ayling, after she convinced him that there was a market for a low-cost airline operating out of Stansted.
Observers believe that Cassani, who joined BA in 1987, is the driving force behind Go's success. Although the airline has not yet made a profit, it is expected to go into the black this year.
Cassani's success with the management buyout has come despite the fact that she was once reprimanded by BA bosses for suggesting that Go could operate independently.
Cassani, who is from Boston, Massachusetts, and who is the world's only female airline boss, came to the attention of BA after her involvement in the buying and restructuring of the troubled DanAir in 1992. Her chances of leading a buyout were strengthened when 3i beat off competition to buy the low-cost airline.
Other interested parties, such as KLM, had also made bids for the business. The Dutch carrier, however, was not selected as a preferred bidder because of concerns that it had plans to merge Go with Buzz, its own low-cost carrier - a move that could run into competition problems.
Any tie-up with Buzz is now thought to be unlikely. A source close to the deal said: "Apart from the fact that they are low-cost carriers, they are very different businesses. A merger is unlikely, although I would never say never."
Although most private-equity businesses aim to make an exit from their investment within three to five years, 3i is understood to have no such plans. Sources say a decision has not been made as to whether the company will float or sell the business.
Barclays Private Equity recently joined 3i in its bid for the airline, strengthening its chances of success. It had originally put forward an offer of £90m with the private-equity group Electra Partners, but it is believed that the bid was considered to be too low.
Both Barclays and 3i have already had some involvement in the airline sector. Barclays had invested in Luton Airport, and 3i backed the start-up City Flyer Express in the late 1980s, turning it into a BA franchisee and selling it to BA two years ago for £75m.
BA had hoped that the sale of Go would fetch up to £300m. But enthusiasm among potential buyers soon waned, with the Hinduja brothers, Easyjet and Iberia, the Spanish carrier, all quitting the race. Easyjet, the Luton-based airline, is believed to have offered BA about £200m in shares, but its approach was rebuffed.