Alitalia Attracts EasyJet, Delta Bids in New Attempt at Sale
(Bloomberg) -- Italy’s Alitalia SpA attracted bids from European discounter EasyJet Plc and U.S. giant Delta Air Lines Inc., as the government renews attempts to sell the bankrupt flag-carrier.
U.K.-based EasyJet said in a statement Wednesday that it submitted a revised expression of interest in Alitalia, while Delta also presented a proposal. Italian state railway company Ferrovie dello Stato said it also made an offer.
The bids raise the prospect of Alitalia gaining multiple owners, with EasyJet bringing its expertise to bear on short-haul operations, and Atlanta-based Delta helping to run lucrative long-haul flights out of Milan and Rome. Ferrovie would most likely act as an anchor investor.
State-appointed administrators for Alitalia confirmed that two binding bids had been received, together with one expression of interest, without saying who they were from. Economic Development Minister and Deputy Prime Minister Luigi Di Maio said that “finding an industrial partner is going to be key.”
Unprofitable Alitalia went into liquidation last year when former 49 percent shareholder Etihad Airways of Abu Dhabi pulled the plug on funding and workers rejected a 2 billion-euro ($2.3 billion) recapitalization tied to 1,600 job cuts from a workforce of 12,500.
An initial bid deadline of April 30 this year was extended to Oct. 31 as Italian political parties struggled to form a new government. The airline has been surviving on a 900 million-euro bridge loan that expires in December, though the facility could be extended while the search for investors continues, according to Italian press reports.
Deutsche Lufthansa AG, which put its name forward earlier in the process, said it decided not to bid, reiterating recent comments from Chief Executive Officer Carsten Spohr that Alitalia would need to be significantly restructured for it to be interested. Also previously involved in the bidding were EasyJet’s low-cost rival Wizz Air Holdings Plc and Air France-KLM Group, a former Alitalia shareholder previously linked to EasyJet’s approach which is about 10 percent held by Delta.
The U.S. company described Alitalia as a long-standing partner in its trans-Atlantic venture with Air France-KLM and said it’s continuing to explore ways to work with the Rome-based carrier. EasyJet said its submission is consistent with its “existing strategy” for Italy, without revealing details.
The involvement of Ferrovie could be a complication for EasyJet, since its high-speed trains are a major competitor for Alitalia on domestic routes. The rail group became part of Italy’s planning following a March general election that led to a populist coalition of the Five Star Movement and League parties.
The government itself could also take a 15 percent stake, reports have said, something that could form a further obstacle to the wholesale job cuts corporate investors might want to impose.
Tim Clark, president of Dubai-based Emirates, the world’s biggest airline on long-haul routes, said Thursday in Monaco that his company didn’t bid but that the Italian market is attractive because of its size and robust demand.
“You see carriers circling around the edge of Alitalia, but whether they’ll plunge in and eat it all I don’t know,” he said.
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