BA shares become IAG shares - discount staying?

Old Nov 24, 10, 8:59 am
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BA shares become IAG shares - discount staying?

I received this email from Barclays:

The following information relates to the terms of the proposed all-share merger between British Airways and Iberia. You will find more information in the letter we will send to you following the General Meeting to be held on 29 November 2010, and we will update our website with further details as they become available.

Proposed Merger Terms

British Airways shareholders will receive one new IAG share for every British Airways share held
Iberia shareholders will receive 1.0205 new IAG shares for every Iberia share held

As this will be treated as a Mandatory event no client instructions are required. We will update your account automatically when the IAG shares have been received.

Key Dates:

General Meeting: 29 November 2010
Delisting from the London Stock Exchange (LSE): 8am 24 January 2011
Trading of IAG admitted to the London Stock Exchange: 8am 24 January 2011

The information in this email was provided by British Airways not Barclays Stockbrokers. The information is believed to be correct but cannot be guaranteed.

To contact us with a query about this merger, please visit our website, login, and select the 'Contact Us' link at the top right hand side of the page, and choose 'Corporate Action - Enquiries only' link from the list of ‘Queries’ options
I wonder if, since Iberia shareholders will hold the same type of IAG shares as current BA shareholders...

1. Will former BA shareholders be able to get a discount on BA with IAG shares?

2. Will former Iberia shareholders be able to get a discount on BA with IAG shares? (If the previous statement is true, then this must be true also)

3. Will IAG shareholders get a discount on IAG airlines throughout?

4. Or, will the discount die entirely?
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Old Nov 24, 10, 9:22 am
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There are previous threads about this topic if you do a search, hopefully we can merge this thread into one of them.

Cut to your questions:
Originally Posted by jghill View Post
I wonder if, since Iberia shareholders will hold the same type of IAG shares as current BA shareholders...

1. Will former BA shareholders be able to get a discount on BA with IAG shares?

2. Will former Iberia shareholders be able to get a discount on BA with IAG shares? (If the previous statement is true, then this must be true also)

3. Will IAG shareholders get a discount on IAG airlines throughout?

4. Or, will the discount die entirely?
This is what is known:

- BA have issued discount codes for 2011, after having previously announced a record date for this.

- BA as a company will not disappear during the merger, it will remain a company in its own right.

- As a result, we should be able to expect our discounts to be honoured by BA on flights throught 2011. [Just as other people BA have obligations towards can expect BA to honour them, and BA will continue to trade as BA, acquring new obligations.]

- BA have expressed the desire of IAG to offer something similar.

- All entitled IAG shareholders will enjoy the same rights to any perks, there will certainly not be any differentiation based upon what share holdings in what predecssor companies any sharehodlers might have held.

- Any discount offered by IAG could be restricted to what ever markets or airline companies within IAG that IAG wishes. So they could decide to have only a discount on BA, but unlikely!

- On the basis of fairness and sensitivities, I would probably not expect the 2011 discount that former BA share holders will likelly to be able to continue to enjoy to be expanded to include other IAG flights, as other IAG shareholders (from the merger or otherwise) would not be able to enjoy this until any IAG scheme comes into effect (2012?)

Last edited by David-A; Nov 24, 10 at 9:27 am
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