Hello

I have decided to post to clarify some questions regarding the Iberia selling process .

First: the most credible source of information is Sepla , Iberia's pilots union , www.sepla.es , http://www.seplanews.com/ .

2 months ago the pilots said that IB managment informed them that several bids were made to IB shareholders and because of that the negociations regarding salary , productivity improvements and the new long-haul plane decision will be postponed until later this year , once the new shareholders take control of IB .

IB managament informed them that the spanish core-shareholders Caja Madrid , BBVA , El Corte Ingles , and others wanted to sell . They were initially financial investors that expected to sell in 2-3 years after privatization in April 2001 , but 9/11 came and they have been forced to wait until now .


This financial investor offered multiple times it's stake to BA , but no agreement was reached regarding price .

The actual process started in May 2006 when BA CEO said ..." a IB merger is not on BA's agenda ..." after a meeting in Madrid with IB managment.

Since them the Spanish banks have been looking for buyers , and have found several ....

Sepla revealed that a pre-agreement had been reached with Lufthansa at 4 Euros/Share for around 30% of IB's capital on hands of Spanish Banks .

"Lufthansa tiene apalabrada con Iberia una oferta a 4 euros por título"(in english , Lufthansa has a pre-agreement for Iberia at 4 euros per share )
http://www.sepla.es/news/archives/009099.php

Source: SEPLA-EFE . Sepla is the Iberia pilots union .

You must remember IB shareholder structure:

40% Core Shareholders
60% Free floated in the market


Core Shareholders

BA and AA 9.95%
Caja Madrid 9.63%
BBVA 7.03%
Logista 6.45%
El Corte Inglés 2.89%
Other Spanish banks

Market

IB shares has raisen more than 100% , from below 2 Euros/Share to 4 Euros/Share in 9 months.

It's mandatory to report to the market authority the accumulation of more than a 5% of IB shares.

Last month State Street Bank reported surpassed the 5% limit on behalf of a 3rd party.

Last week, Apax Partners announced that have surpassed a 5% of IB shares .

Daily trading of IB shares raised from a 2% of IB's capital daily to more than 5% daily. Huge movements of IB shares in the last months.


In the meanwhile Texas Pacific Group , http://www.tpg.com/ , aproached IB . Everybody here believes that Texas Pacific came along with BA , so a succesfull TPG offer would mean IB stay at Oneworld , associated with BA .

However in the last week the Spanish govement warned that they don't want a Hedge Fund adquiring Iberia . The right opposition party shared the concern via it's economy speaker . This prompted that last thurday , IB managment asked TPG for the name of the necesary Spanish partner and if the offer came linked with an airline ( unofficialy , BA ) .

Sepla has said that they prefer an industrial partner over a Hedge Fund ... in other words , the extremly powerfull pilots unions favors the Lufthansa bid over the Texas Pacific Group bid ... .


Inside IB , the CEO Conthe favors BA while the CFO ,and chief strategist , Dupuy De Lome favors Lufthansa .

Both IB and LH CEO's denied the same morning ,that any "formal" meger talk were taking place between IB and LH , obviously the formal merger talks will be announced in the joint press conference that will de facto announce the merger.

LH CEO has been trying to cool IB shares with comments that IB shares were to expensive , etc ... last minute intentions to get a cheaper deal from minority shareholders ( unofficialy at 3.90 ).

In the next 2-3 weeks it's expected TPG to make a formal bid . When the first formal bid will be launched , in the next 30 days additional bids should be made , the Lufthansa bid plus perhaps some last minute surprise .

By the end of May , beginning of June the winner will be know , but few people here doubts that it will be Lufthansa plus a new Spanish Investor.

The Spanish investor is rumored to be ACS , the biggest european construction company that in the last week has adquired a 25% of Germany's #1 construction company Hochtief . ACS has 3 billions Euros at his disposal from a live credit line for adquisitions .

http://www.grupoacs.com/index.php/en/

ACS owns 20% of Clickair along with Iberia .

The other rumored Spanish partner for Iberia is Grupo Marsans, www.marsans.es , owner of Aerolineas Argentinas , Air Plus Comet .

Marsans CEO , Gonzalo Pascual , is the current Spanair president . Last thusday Marsans confirmed press reports that Gonzalo Pascual was in Germany ... without giving further explanations.


Numbers also favors the LH option for IB .

66% of Iberia passenger on intra-european routes out of MAD are transit passengers most of them to the long-haul south american routes . Only 33% of IB passengers out of MAD airport arrive or depart from Madrid .

European country of origin of LatAm routes:

1) Germany
2) Italy
3) France
4) UK

LH control #1 feeder market of IB long-haul routes , and has a deep foot on the #2 Italy . In contrast , BA only controls the #4 market.

There are significant german comunities in Argentina , Brasil , Chile , plus an increasing mutual comercial interest .

BA show lack of commitment for the Oneworld alliance . BA flights to Spain wouldn't move to new T5 at LHR , plus multiple others examples .


IB and LH fleets are similar . LH is #1 A-340 operator , IB is #2 . Both companies have large , rather modern fleets . In contrast BA has an old 747 fleet with some planes reaching the 20 years . Few weeks ago 5 BA 747 went technical simoultaneously , causing havoc on BA's long haul schedule ... we must remember this .

Given the deep links of IB with LAN , its reasonable to think that LAN would follow IB steps into Star Alliance .

Spanair shouldn't been any kind of a problem . SAS has put the "FOR SALE" on Spanair for years , without anybody interested ... . Hundred of millions of Euros of losses at Spanair . When Iberia launched Clickair , the chief Spanair pilot recruiter leave Spanair to lead Clickair pilots . Senior pilots and FA are leaving the Spanair boat and aproaching Iberia . By the way Spanair no longer operates long haul routes . The few they operated , the last ones to China , were a complete disaster .

While reading on this forum I have read from multiple posters that "Iberia don't deserve to be on the Oneworld Alliance" , ".. i book on iberia.com only to fly on BA metal on the codeshare ...." , "..avoid Iberia like the plague .. " , etc ,etc ... well , the desire of lots on this site will be fullfilled ... by June LH will take control of IB .

Obviously IB will swith to Star Alliance , http://www.staralliance.com , as soon as possible .

Anybody know what is the minimun warning period for an airline to leave oneworld ?

The combined LH-IB will be the biggest airline in the world based on revenues of more than 20 billion euros . More than 80 Millions passengers per year .

The combined fleet is awesome .

LH-IB Hub network

FRA... LH
MUC... LH
MAD... IB
BCN... XG
VLC... YW
ZRH... LX


LH CEO said last week that they expect 1 Billion Euros of operating results for 2007 . IB expected 250 Millions for 2007 , before the additional 100 Millions of extraordinaries coming from the Amadeus , www.amadeus.net , re-financing operation . By the way both IB and LH uses Amadeus , as both of them along with AF created the system .


It makes much more sense for IB an alliance with LH than with BA .