Avianca drops most since October

Berlin / Bloomberg

Avianca Holdings SA dropped the most in seven months, paring a rally that was sparked by speculation other airlines may seek to acquire a stake in the company, after Chairman German Efromovich said he’s currently seeking a partner rather than a buyer for the company.
The stock dropped 7 percent to 2,475 pesos at 1:15 p.m. in Bogota trading, the most since October. The shares had advanced 32 percent this month through Wednesday amid speculation Avianca
will find a partner or might be a takeover
candidate.
Efromovich on Thursday said that the airline is looking for a strategic partner, which could be a part of one of the airline alliances or a large Chinese investor. The deal could include an investment equal to a 10 percent to 20 percent stake, the value of which wouldn’t be based on the airline’s current book value, he said. In an interview on W Radio, Efromovich said that at this moment he isn’t selling Avianca but instead looking for a strong alliance that would improve the company over the long haul.
“The bottom line after such a rise is that people aren’t convinced about the takeover rumors,” Rupert Stebbings, the managing director of equity sales at Bancolombia SA, said from Medellin.
A lot of investors “sat on profits so they are selling.”
Avianca jumped the most on record on June 3 amidreports that Delta Air Lines Inc. and United Continental Holdings Inc. are weighing bids for the Latin American airline. Avianca was exploring strategic options including a full or partial sale, people familiar with the matter said at the time. Avianca recently began working with a financial adviser to raise about $500 million in a process that could lead to an outright sale, said one of the people, who asked not to be identified because the matter isn’t public.