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Embattled Alitalia Attracts Approaches From EasyJet, Lufthansa

EasyJet Makes Approach for Possible Takeover of Alitalia

(Bloomberg) -- Alitalia SpA has attracted interest from a host of European rivals including budget carrier EasyJet Plc and Deutsche Lufthansa AG of Germany as part of a government-led rescue effort for the cash-strapped Italian airline.

Alitalia, which is based in Rome, has said it received three offers, without specifying from whom. Lufthansa confirmed Wednesday submitting a document, while EasyJet, which is Europe’s second-biggest low-cost airline, said Tuesday its “revised expression of interest” was made as part of a consortium, without naming the other members. Both carriers referred to a restructured version of Alitalia.

Air France-KLM Group and private equity investor Cerberus Capital Management are part of the EasyJet group, according to a person familiar with the matter who asked not to be identified. A spokeswoman for the French airline said it doesn’t plan on taking a stake in Alitalia, while a representative of Cerberus could not provide immediate comment. Wizz Air Holdings Plc has declined to comment on a report in Italian newspaper Il Sole that it’s also in the running.

This is the second time in a decade that Alitalia has sought to attract an international partner after filing for bankruptcy. The carrier, which is on government life support, was declared insolvent almost a year ago and has been in talks with a number of foreign investors interested in acquiring parts of its business, which could provide a gateway for competitors into the Mediterranean market. Italy has pumped 900 million euros ($1.1 billion) into the airline through bridge loans during the past year to keep it afloat.

‘No Certainty’

“There is no certainty at this stage that any transaction will proceed, and EasyJet will provide a further update in due course if and when appropriate,” the Luton, England-based carrier said in its statement. Lufthansa, which has its main hub in Frankfurt, said its document outlined ideas for a “restructured” Alitalia and could envisage further talks.

A takeover of Alitalia would come on top of EasyJet’s successful bid for defunct Air Berlin’s operations at the German capital city’s Tegel Airport. With that acquisition, the carrier’s fleet will exceed 300 single-aisle Airbus SE aircraft and the number of passengers is expected to rise to 90 million in 2018.

Lufthansa expressed interest last year in portions of Alitalia, saying it would preserve the Italian rival’s long-term economic prospects. Ryanair Holdings Plc pulled out of the bidding process, saying it needed to focus on fixing the fallout from a staffing shortage. Air France would like to keep Alitalia as part of the global SkyTeam alliance, which includes Grupo Aeromexico SAB and Delta Air Lines Inc., without buying an equity stake, Chief Financial Officer Frederic Cagey told Bloomberg TV in February.

Political Questions

Italy’s political uncertainty means additional financial assistance for Alitalia may not be forthcoming. The country is in the process of trying to form a coalition government after March 4 general elections resulted in a hung parliament with no party having enough votes to govern. President Sergio Mattarella is holding talks with parties this week to try to find an accord.

In 2014, Abu Dhabi-based Etihad Airways PJSC took a 49 percent stake in Alitalia with plans to cut costs and focus on longer international routes from Rome and Milan. Those plans faltered when Alitalia went bankrupt.

--With assistance from Manuel Baigorri and Ania Nussbaum

To contact the reporters on this story: Benjamin Katz in London at bkatz38@bloomberg.net, Tara Patel in Paris at tpatel2@bloomberg.net, Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net.

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Tom Lavell

©2018 Bloomberg L.P.