Lufthansa seeking conditions in looming bid for Italy’s ITA

Bloomberg

Deutsche Lufthansa AG is discussing some conditions with Italy in order to proceed with its plan to acquire a 40% stake in the country’s ITA Airways, according to people familiar with the matter.
The German carrier is seeking to gain the option to back out of a full takeover should the venture fail to work out, as well as legal waivers to protect against unforeseen issues arising from the integration of the successor to bankrupt carrier Alitalia, said the people, asking not to be identified discussing confidential deliberations.
Lufthansa is still deliberating the contours of its preliminary bid, which could come in the latter part of this month, said the people. Plans under discussion would see the German carrier paying as much as 350 million euros ($376 million) to take an initial 40% stake in ITA Airways via a capital increase, and could eventually seek a majority stake at a later date, while also leaving room for a second investor to join the group.
The Italian government is confident that a deal will ultimately be sealed, people said. Figures are subject to changes as the plan is not definitive.
A spokesman for Lufthansa declined to comment, as did an official for the Italian government.
Lufthansa has been linked with ITA and its predecessor Alitalia for years. An acquisition of Italy’s former national flag carrier would allow the German group to expand its lucrative transatlantic business, with Italy one of the most popular entry points to Europe for travellers from the US
Lufthansa’s deliberations over an escape clause reflect concern at the German airline about ITA’s financial performance. The airline has been historically unprofitable, requiring regular government bailouts. While senior management at the German carrier is supportive of a potential deal, a backout clause would help soothe
concerns of other stakeholders,
including the airline’s unions.