British Airways has partnered with a private equity consortium comprising US-based TPG Capital and Vista Capital, Inversiones Ibersuizas and Quercus Equity of Spain to investigate a possible bid for Spanish flagship carrier Iberia.
The airline, which already holds a 10% stake in Iberia and first right of refusal to a further 27%, has previously ruled out making any further capital investment as part of a consortium and said that it would not make an independent bid for the airline.
TPG Capital made a preliminary offer of €3.4bn in late March before bringing in its Spanish partners.
According to reports in the Spanish press, Spanish banks BBVA and Caja Madrid are considering making a rival offer and could also link up with investment firms Gala Capital, Torreal and the Lara family. However, another report suggests that BBVA is prepared to sell its 7.3% stake in the Spanish flag carrier. Gala holds a 10% stake in Iberia.
Global private equity firm Apax Partners has also been mooted as a potential bidder for Iberia, having already failed to partner with German carrier Lufthansa for a joint bid. Apax already has an interest in the Spanish airline sector through its 40% stake in Barcelona-based Vueling Airlines and is also rumoured to have been in talks with Torreal and fellow Spanish investment firm Inversiones Hemisferio regarding a joint bid.
BA’s decision is believed to be motivated by a need to defend its rights to fly to Latin America via Spain, which are based on majority Spanish ownership, hence the presence of Ibersuizas, Vista Capital and Quercus in the consortium, which are expected to hold a 51% share of Iberia if a bid is made and accepted.