British Airways has approached private equity firms about teaming up for a possible takeover of Spain's Iberia but will not bid alone, Europe's third-biggest airline said today.
Texas Pacific Group (TPG) has made a €3.4 billion indicative bid for Iberia and sources close to the situation say fellow private equity firm Apax Partners is also eyeing a deal.
BA is considering teaming up with TPG, Apax, or working with a Spanish private equity firm, a source familiar with the matter said.
"The airline has approached a number of private equity companies about making a consortium offer for Iberia," BA said in a statement to the London Stock Exchange.
"As well as a private equity partner, this consortium is likely to include one or more Spanish partners," BA said, but added that any deal "would not involve further capital investment by British Airways".
BA already owns 10 per cent of Iberia and has first refusal rights over an additional 32 per cent. Iberia's shares have doubled in six months as a deal to liberalise transatlantic air markets and a $9 billion private equity takeover of Australia's Qantas helped fuel expectations of wider industry consolidation.
The shares have been supported by TPG's bid approach and news reports saying Apax was looking at a move on Iberia teamed with Spain's Gestair, a firm which leases aircraft to the airline.
Shares in Iberia shed early gains to trade down 0.25 per cent at €3.95 while BA was up 0.1 per cent at 514 British pence.