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IAG mulls takeover of Norwegian?

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IAG mulls takeover of Norwegian?

Old 14th Apr 2018, 08:34
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Originally Posted by EIFFS
The money raised from the recent share offer was from core investors who are long term the second tranch to be approved on the 13th (today) is for investors not included in tranch 1 to ensure that they are treat equally.

This placing was to provide a buffer to ensure that Norwegian did not breech its banking covenants
I had missed the announcement that Norwegian would possibly breach their banking covenants. This is the first step for an already heavily-borrowed company in announcing they are running out of cash. For a public company, this has to be announced to the stock exchange. It also commonly means that upper management take their eye off the running and progress of the company's product, to all be focused every day on the spreadsheets showing how the cash (is) coming in, and (is not) going out.
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Old 18th Apr 2018, 22:07
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Looks like IAG have hired JP Morgan to finance a possible take over and that their stake in Norwegian has risen from 4.6 to 5%.

As I posted on another thread, a fortnight ago I was seriously thinking of having a punt on a few Norwegian shares - now kicking myself for my laziness!

Norwegian Air?s shares flying high
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Old 22nd Apr 2018, 15:09
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WHBM.......Curious to know who got that 1 BA gave for BCal. That nice Lord King gave self and many others 12.15 for each of our shares, and treated the event as a merger....up to a point, naturally..
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Old 22nd Apr 2018, 15:45
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Originally Posted by pax britanica
Even if you get access to the books there are plenty of stories from the business world where pre M&A due diligence failed to uncover catastrophic problems .

As in the QANTAS . Jetstar case the books tell you one thing but reality is another and in a situation like Norwegian arcane financial engineering might make it very very difficult to get a true picture of the real state of play.
Buyer beware
From a previous life I can tell you that any decent management accountant worth his (or her) salt will be able to decipher the bull**** and give a reasonable assessment of the state of play to the buyer.

Due diligence may not uncover everything but if people are found lying they are liable. Additionally, any contract of sale will include certain warranties valid for 'x' period so its not quite as simple as them hiding stuff and IAG not finding it.
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Old 22nd Apr 2018, 18:21
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Originally Posted by ONE GREEN AND HOPING
WHBM.......Curious to know who got that 1 BA gave for BCal. That nice Lord King gave self and many others 12.15 for each of our shares, and treated the event as a merger....up to a point, naturally..
OG&H. Sale for "1 - plus all the debts" is finance-speak for a merger (which is generally the correct word for a takeover) where the net value of the shares is negligible - or even negative. But it is a financial convention that to be a merger it must be "for a consideration".

You also have to make a judgement that if you don't offer the principal shareholders anything they will go and make a nuisance of themselves with the Monopolies Commission (as it was then), as they then have nothing to lose. Nothing to do with the inherent trading account of the business or its assets.

Did you accept or reject the share offer ? What were they trading for at the time ?
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Old 22nd Apr 2018, 20:21
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EBITDA(R) maybe good but if you are not making profits you are not increasing your cash flow. No cash eventually no way to trade.
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Old 4th May 2018, 11:14
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http://www.bbc.co.uk/news/business

Norwegian Air Shuttle, the fast-expanding budget airline, says it has unanimously rejected two bid offers from the owner of British Airways.International Airlines Group (IAG), which owns 4.6% of Norwegian, is seeking to lift its market share amid competition from low-cost carriers.But Norwegian said the proposals undervalued the firm and its prospects.

Shares in Norwegian initially fell as much as 10% on the news before recovering slightly.

By contrast, IAG was the top gainer on London's FTSE 100, up 5.6%.

News of the bids first emerged in an investor presentation by IAG, which also owns Spanish airline Iberia.IAG was giving the presentation after it posted a big jump in operating profits for the first quarter of 2018, thanks in part to strong demand over Easter.Underlying earnings were €280m (247m) before exceptional items - up from €160m last year. Revenue climbed 2.1% to €5bn.

IAG said it had "had contact with the Norwegian board regarding a possible offer, without reaching agreement".In response, Norwegian issued a statement confirming that it had received "two separate conditional proposals" from IAG offering to buy the entire company.

Norwegian Air has earned a name for its low-cost deals, such as 99 one-way flights from Edinburgh and Dublin to New York. However, it reported a net loss in 2017 and had to raise fresh funds earlier this year to cope with its rapid expansion and higher fuel costs.Nevertheless, its move into discount intercontinental flights has shaken up the market and forced bigger rivals such as IAG and Air France to take measures to win back customers.IAG has already put a toe in the budget long-haul market with Level from Barcelona, while adding European airport slots from failed UK airline Monarch."Norwegian's finances may be stressed, but it's playing tough," said Neil Wilson, chief market analyst for Markets.com. "We note that it received interest from other parties once the IAG stake was revealed and this may be the reason for it to squeeze as much as it can from a bidder, although 'rescuer' may be more appropriate."We now have the prospect of a bidding war for Norwegian,


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Old 4th May 2018, 12:33
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Originally Posted by 2 Whites 2 Reds
From a previous life I can tell you that any decent management accountant worth his (or her) salt will be able to decipher the bull**** and give a reasonable assessment of the state of play to the buyer.

Due diligence may not uncover everything but if people are found lying they are liable. Additionally, any contract of sale will include certain warranties valid for 'x' period so its not quite as simple as them hiding stuff and IAG not finding it.

At my previous company, the Finance Director once told me -

Certifed Accountants keep the books...Chartered Accountants audit the books...And Management Accountants understand what the numbers mean.
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Old 5th May 2018, 09:29
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Business pages today's Times saying that not surprising Norwegian turned down the offer - trying to flush out other offers as the two main men own 27% of the shares for a start. Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive
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Old 5th May 2018, 11:59
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Originally Posted by Heathrow Harry
Business pages today's Times saying that not surprising Norwegian turned down the offer - trying to flush out other offers as the two main men own 27% of the shares for a start. Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive



And AF don't hold most slots at CDG and ORY ?

Nor LH at FRA and MUC and then add in GVA, ZRH, BRU and VIE in LH's case.

Hardly anti-competitive in it's true sense like operating a cartel - more a function of LHR and LGW and LCY being BA's home bases, that's all.
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Old 5th May 2018, 12:22
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Any deal would almost certainly would referred to the Competition Authority - given BA's past history who would be surprised???
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Old 5th May 2018, 23:23
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Originally Posted by Heathrow Harry
Any deal would almost certainly would referred to the Competition Authority - given BA's past history who would be surprised???
"past history" ? please explain.
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Old 6th May 2018, 00:15
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Originally Posted by Heathrow Harry
Also raised the question of slots of LGW - BA would hold most slots at both LHR & LGW and that has to be anti-competitive
Tut tut, like so many here you are confusing IAG and BA of being one and the same, and they are not. IAG, not BA, would have the slots, and be able to parcel them out to any of the several airlines in their group.
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Old 6th May 2018, 17:23
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I think you'd find that most people out there think BA (a major component of IAG) has a long history of anti-competitive behavior

I really doubt the name makes any difference - it cannot be good for competition to have one airline owning the majority of slots at BOTH major UK airports
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Old 7th May 2018, 13:35
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Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. If Norwegian would keep its own AOC and operating certificate it would have to be viewed as a seperate company from BA and therefore should not be anti competitive. Similar situation happening in different industries, just look at what News Corp and Rupert Murdoch have acquired.
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Old 8th May 2018, 08:49
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Originally Posted by flyingmed
Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. .

Competing with codeshare on numerous flights and now having the same loyalty programme?
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Old 8th May 2018, 09:14
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Originally Posted by flyingmed
Although it seems like it would be anti competitive IAG has a few of its airlines competing against each other especially in Spain between Vueling and Iberia. If Norwegian would keep its own AOC and operating certificate it would have to be viewed as a seperate company from BA and therefore should not be anti competitive. Similar situation happening in different industries, just look at what News Corp and Rupert Murdoch have acquired.
competition authorities dont look at arcane bits of paper like AOC's... they follow the money and control structure
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Old 9th May 2018, 03:43
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Originally Posted by Heathrow Harry
competition authorities dont look at arcane bits of paper like AOC's... they follow the money and control structure
That's what should happen, lets see if the authorities react appropriately. IAG have already moved into markets and created monopolies without any real intervention from the authorities before so I would imagine they will manage to do it again. That's probably why they are very successful at what they do.

Last edited by flyingmed; 11th May 2018 at 14:28.
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Old 12th May 2018, 11:59
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Media: IAG checks bidding team with Ryanair for Norwegian

OSLO - The war of nerves around Norwegian goes into the next round - if the British Airways Group IAG attaches to take over the Norwegian price breaker, could CEO Willie Walsh get reinforcements on the boat: IAG is considering a joint bid with Ryanair according to media reports.
aero.de

https://translate.googleusercontent....bAUctSu7Swnp7A
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Old 15th May 2018, 15:03
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I heard the same thing...
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