news in brief

• Italian airline Alitalia has confirmed that private equity firm TPG is unable to form an Italian consortium to lead a purchase. Nevertheless, Alitalia said that TPG will follow the privatisation “with interest”. Alitalia is understood to have encouraged would-be bidders to form alliances with Italian parties to keep the airline’s national links in order to maintain specific routes. The airline has said that it will announce a preferred bidder to the Italian government by mid-November. Interested parties during recent months have included Aeroflot, Air France-KLM, Deutsche Lufthansa and Air One. But the latest reports suggest that only Luftansa and Air France are still viable contenders. Aeroflot has said it will decide whether to make a bid for Alitalia during the next two weeks.

Bridgepoint, a pan-European private equity firm, has drawn up a shortlist of investment banks to investigate a potential £600m (€863.3m) sale or flotation of its Pets at Home portfolio company. According to reports, the banks include Citi, Goldman Sachs, NM Rothschild and UBS. The banks are understood to be preparing to pitch for the mandate in the next three weeks. Bridgepoint bought Pets at Home for £230m in 2004. The private equity firm is believed to have carried out a £288m refinancing of Pets at Home last July, generating a £100m payout to shareholders, in addition to £70m from an earlier refinancing in 2005.

• Private equity firm Lion Capital could consider auctioning Wagamama, a chain of noodle bars, rather than pushing ahead with a planned float. Reports have suggested a lukewarm response to the chain’s planned £225m (€324.2m) IPO. But now Lion Capital is thought to be weighing up several offers from interested parties that may yield greater returns. Lion Capital took a majority stake in Wagamama in June 2005 in a £102.5m secondary buyout from Graphite Capital. The deal proved a satisfactory exit for Graphite, which invested just £2.3m in Wagamama in October 1996.

• The £4bn (€5.8bn) buyout of EMI, a UK music publisher taken private by UK-based LBO firm Terra Firma Capital Partners earlier this year, could be in trouble over concerns about contributions to its pension scheme.Trustees to the EMI Group Pension Scheme have been in talks with EMI and the pension regulator for months, but wrote to members this month to say that negotiations with Terra Firma had proved fruitless. The trustees have now called the pension regulator to step in. Terra Firma insists that a shortfall in the scheme does not exist, although figures in EMI’s annual report show a deficit in March of £7m on total liabilities of £962m.