British Airways Backing TPG Bid For Iberia - Report

May 21, 2007

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British Airways has decided to support a bid for Spanish airline Iberia led by private equity firm Texas Pacific Group, Europa Press news agency reported on Monday.

Quoting sources close to the deal, Europa Press reported that the consortium would include Spanish funds Vista Capital -- controlled by banks Santander and Royal Bank of Scotland -- Inversiones Ibersuizas and Quercus Equity.

BA, which owns 10 percent of Iberia, declined to comment on the report. TPG was not immediately reachable.

BA CEO Willie Walsh said an announcement of a deal could come as soon as Tuesday, but gave no further details.

"We are in the final stages of discussions with some private equity interests," Walsh told investors and reporters at a meeting in New York on Monday, on the subject of Iberia.

"I expect to be in a position to announce a formal decision in relation to our participation in a consortium at some stage this week, possibly as early as tomorrow," he added.

TPG and its partners have already made an indicative bid worth EUR3.4 billion euros (USD$4.6 billion) for Iberia, or 3.60 euros per share. Iberia stock closed up 0.5 percent at 3.92 euros.

The Europa Press report said BA had opened the door to Apax Partners to join the TPG-led group but it was not clear whether the second private equity firm had decided to come on board.

Spanish investors will own at least 51 percent of Iberia's capital, with Vista Capital holding "significant weight," Europa Press quoted sources as saying.