Air France Delays Iberia Bid To March - Report

November 26, 2007

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Air France-KLM is working on an offer for Iberia that is well above the indicative 3.60 euros a share presented by British Airways and private equity firm TPG, a news agency reported.

But Air France will not make any bid until after Spain's general elections in March, the Europa Press agency reported sources close to the French airline as saying.

"Air France is now in a waiting period. It requires patience. No government likes such a takeover bid right in the middle of an electoral campaign," a source told the agency.

Air France said it had no immediate comment to make on the report.

Opinion polls show the ruling Socialist party narrowly ahead of its conservative rivals, the Popular Party.

Monday could be a key day in the battle for Iberia as BA and TPG effectively decide whether to proceed with their EUR3.4 billion (USD$5.07 billion) bid for the airline.

The consortium has to say by the end of the day whether it intends to buy part of BBVA's 7 percent stake or let lender Caja Madrid buy the shares.

Spanish investment vehicle Gala Capital, along with bank BBK and the chairman of Spanish airline Air Europa, made a takeover approach two weeks ago at 3.60-3.90 euros per share.