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Alitalia conditionally accepts joint bid by Air France and KLM

Sunday, March 16, 2008

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Italian state-owned flag carrier Alitalia's board has conditionally accepted a low-value takeover bid by Air France-KLM, a company formed by the merger of Air France and KLM.

Alitalia say the offer requires various conditions to be met by March 31 if it is to succeed. A board meeting, which ended unanimously, started mid-Saturday and continued until early Sunday, at which point a press release was issued. This named key conditions as approval by the trade union, agreement from the government - which must also supply a credit line repayable after a credit hike - and "elimination" of risks from a suit by Milan airport operator SEA. The government owns a 49.9% controlling stake.

Further conditions include receiving a government commitment to keep the airline's landing rights, agreeing with Rome International Airport's operator over servicing and a deal to buy back some activities at Alitalia Servizi, a maintenance arm.

Air France-KLM, who placed their bid on Friday after negotiations lasting eight weeks, welcomed the decision in Paris. The deal values at Alitalia at €0.10, compared to a Friday trading value of €0.53, and will swap one Air France-KLM for every 160 Alitalia shares, valuing the airline at €140 million (US$240 million). The low price comes as a result of financial difficulties that the airline is currently facing. Initial rumours suggested the price would be €0.35 a share.

Also being bid on is 100% of convertible bonds at €0.3145 a bond. The state owns 62% of these. The company will keep its brand, logo and Italian headquarters.


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Articles presented on Wikinews reflect the specific time at which they were written and published, and do not attempt to encompass events or knowledge which occur or become known after their publication.

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