Norwegian Air: Serious suitors after IAG move

Bloomberg

Norwegian Air Shuttle ASA said it has attracted interest from other potential suitors since the revelation that British Airways parent IAG SA may bid for the company.
Norwegian received several inquiries after IAG disclosed that it was building a stake and might make a formal offer, it said, sending the stock 16 percent higher. Chief Executive Officer Bjorn Kjos told Bloomberg TV that the approaches come from “very serious, professional” airline groups.
In a softening of his stance on a takeover, Kjos announced the appointment of a steering committee and financial and legal advisers to handle the situation, adding that while the board may not back a deal at Norwegian’s current value, “there’s a saying that if the price is right, everything is for sale.”
The comments mark a shift from Kjos’s outright rejection of the overtures from IAG, whose CEO Willie Walsh he described as “one of the best guys in the industry.” The London-based group, which owns Spain’s Iberia, Aer Lingus of Ireland and discounter Vueling, as well as BA, said it had bought 4.6 percent of the Nordic carrier’s shares and was weighing an offer for the rest.
The additional inquiries disclosed by Norwegian “may not be as serious” as those from IAG, but could drive any acquisition price higher, Davy Holdings analyst Stephen Furlong said. Kjos said he’s happy to have IAG as an investor and intends to act in the best interests of all shareholders.
Norwegian has become a target as it grapples with a stretched balance sheet after splurging on the planes needed to compete with the likes of Ryanair on European routes while establishing a pioneering discount operation in the trans-Atlantic market.
The company said that additional capital, including a share placing this quarter, is poised to “boost competitiveness and protect existing and
future investments,” while confirming that a programme of aircraft divestment will extend to as many as
140 jets, raising further funds.
Norwegian ordered 200 new-generation narrow-body jets in 2012, split equally between Boeing Co. and Airbus SE models, but plans to standardise it’s short-haul fleet around the US company’s 737 and take only some of the European aircraft.