Qatar take 9.99% stake in IAG (BA Owners)

Old May 24, 16, 1:52 am
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Originally Posted by SinoBritAsia View Post
I don't think speculation for an IAG bid for Wizz should be dismissed out of hand.

Why? Former Vueling CFO Sonia Jerez Burdeus moved to Wizz (officially starts her new role June 1). And by having an ex-IAG airline senior executive moving to another LCC could be a masterstroke by way of having someone on the inside so to speak.

Also, profitable. FY estimate to the tune of around US$230m last year. More profitable than Vueling (I think?) And low debt and free cash flow of US$650m.

Importantly, IAG able to capture a huge share of traffic in Eastern Europe where it is currently underserved. It could consolidate IAG's LCC portfolio from Spain and Italy in Southern Europe to conquer Eastern Europe.

Plus fleet commonality of A320s. Not so sure about common fleet for engines though.

Wizz air is actually based in Jersey and listed on the London Stock Exchange and most of it shares seem to be in free float. There are a couple of analyst reports which suggest that Wizz Air may put itself up for sale so the investors can cash out. So sounds like it's"in play" and IAG could bid for it. Not sure if other companies may also be interested.

But I suspect IAG have their hands full with interrogating EI for the moment.
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Old May 24, 16, 1:57 am
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Originally Posted by Worcester View Post
But I suspect IAG have their hands full with interrogating EI for the moment.
OMG, what's EI done wrong now?
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Old May 24, 16, 2:02 am
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Originally Posted by Globaliser View Post
OMG, what's EI done wrong now?

Yes well spotted. Just in case EI's lawyers are reading this I did in fact mean integration...
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Old May 24, 16, 2:10 am
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Originally Posted by Worcester View Post
Yes well spotted. Just in case EI's lawyers are reading this I did in fact mean integration...
Or integrating even
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Old May 24, 16, 2:14 am
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Originally Posted by Tobias-UK View Post
Or integrating even
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Old May 24, 16, 2:46 am
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Originally Posted by Worcester View Post
Wizz air is actually based in Jersey and listed on the London Stock Exchange and most of it shares seem to be in free float. There are a couple of analyst reports which suggest that Wizz Air may put itself up for sale so the investors can cash out. So sounds like it's"in play" and IAG could bid for it. Not sure if other companies may also be interested.
That's a bit misleading though. It's actually owned majority owned by an American private equity firm Indigo Partners but because of the >50% EU ownership requirements their holding has a complicated structure. They own 19% of the 56m ordinary shares, but effectively own another 69m shares in the form of non-voting convertible shares and notes. So in fact they effectively own an economic interest of 63%.

I can't see any compelling reason why management would want the business sold now: I can't think they've fully executed the expansion phase based on the money raised at last year's listing. But it may be the natural time for Indigo to cash out and if so a corporate sale would no doubt appeal. Any press/analyst coverage may just be Indigo waiving a flag though - it might not be coming from interested buyers.
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Old May 24, 16, 4:48 am
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Originally Posted by pauldb View Post
That's a bit misleading though. It's actually owned majority owned by an American private equity firm Indigo Partners but because of the >50% EU ownership requirements their holding has a complicated structure. They own 19% of the 56m ordinary shares, but effectively own another 69m shares in the form of non-voting convertible shares and notes. So in fact they effectively own an economic interest of 63%.

I can't see any compelling reason why management would want the business sold now: I can't think they've fully executed the expansion phase based on the money raised at last year's listing. But it may be the natural time for Indigo to cash out and if so a corporate sale would no doubt appeal. Any press/analyst coverage may just be Indigo waiving a flag though - it might not be coming from interested buyers.
Once Brexit has passed without consequence or actually the UK voting to leave the EU - that should pave the way by September (I reckon) for IAG to weigh up a formal bid.
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Old May 24, 16, 5:13 am
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Originally Posted by SinoBritAsia View Post
Once Brexit has passed without consequence or actually the UK voting to leave the EU - that should pave the way by September (I reckon) for IAG to weigh up a formal bid.
Do IAG really have the management time to buy another airline now??
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Old May 24, 16, 6:08 am
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Originally Posted by Calchas View Post
Do IAG really have the management time to buy another airline now??
Probably not, but suitable targets are few and once a airline is "in play" IAG may decide to bid is the better alternative rather than loose the opportunity to one of their rivals.
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Old May 24, 16, 6:16 am
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Originally Posted by pauldb View Post
That's a bit misleading though. It's actually owned majority owned by an American private equity firm Indigo Partners but because of the >50% EU ownership requirements their holding has a complicated structure. They own 19% of the 56m ordinary shares, but effectively own another 69m shares in the form of non-voting convertible shares and notes. So in fact they effectively own an economic interest of 63%.

I can't see any compelling reason why management would want the business sold now: I can't think they've fully executed the expansion phase based on the money raised at last year's listing. But it may be the natural time for Indigo to cash out and if so a corporate sale would no doubt appeal. Any press/analyst coverage may just be Indigo waiving a flag though - it might not be coming from interested buyers.
It is almost certainly coming from bankers. Which bankers is the more interesting question.
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Old May 24, 16, 2:16 pm
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Interesting comments about WizzAir. I have to admit to not knowing much about them, but CAPA reports they are the 2nd most profitable airline in Europe so I can see the attraction to IAG.

http://centreforaviation.com/analysi...ogramme-282810

It does also have a very strong presence at LTN where Vueling has been trying to gain a foothold.

On the subject of more consolidation, WW made some rather cryptic comments at the last IAG investor update in response to a question about press speculation that LH might buy SAS and the remaining shares in Brussels Airlines:

I was pleased to read some comments from Carsten Spohr in relation to consolidation. You've heard me talk about this for some time. I believe consolidation will benefit the industry within Europe, and I think there are some things that make sense to various different airlines around Europe.

And what makes sense to Lufthansa doesn't necessarily make sense to us, but that doesn't mean what they're doing is wrong. In fact, I think what they're suggesting is absolutely right for them.

We have said that we don't see any particular options for us at this stage, but we are continuing to keep an open mind and continuing to evaluate potential options, though we're not actively involved in anything at this stage.

But I do firmly believe that we will see further consolidation in Europe as we go through 2016, and some moves may unlock some other moves. So we're ready to take advantage of any opportunity should the right opportunity come along.

Last edited by ian001; May 24, 16 at 2:21 pm
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Old May 24, 16, 3:05 pm
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I think the mood music is clear from IAG on all this; the path to further profits lies in JVs and takeovers. It doesn't lie in basics such as product innovation. That strategy worked well for BA 15-20 years ago but it's definitely not where they see their investment strategy in the short to medium term.

Such a shame, but I understand the drivers that are behind it from a shareholder return perspective.

The day that BA takes it's core product seriously, like really seriously and innovate it like they once did, is when they appoint someone at the helm who isn't a low cost junkie. IMHO.
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Old Jul 28, 16, 9:05 am
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The stake building continues...

http://www.bloomberg.com/news/articl...ys-owner-to-20
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Old Jul 28, 16, 1:41 pm
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Effective control is not that far off...
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Old Aug 1, 16, 2:33 am
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BBC Business Live reporting this morning that Qatar has indeed now purchased more IAG stock taking its shareholding to 20.01%.
It claims it has no plans to further increase its shareholding unless the situation changed materially and that this purchase was more due to the recent drop in IAG's share price which provided an attractive opportunity to increase its stake in the group.
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