Alitalia sold at bargain price

The board of Alitalia approved a formal takeover offer put forward by Air France- KLM, after a marathon meeting early last Sunday, e-Travel Blackboard: C.F reported.

The takeover which placed a very low value on the Italian flag carrier is seen as critical to the troubled airline's survival and a key first issue for the new government in Rome to be elected next month.

Alitalia's board of management reached unanimity and decided to accept the offer by Air France-KLM and to conclude the said contract, the Alitalia statement said.

The new Alitalia would keep ‘its Italian identity’ as well as its own brand and logo.  About 1,600 jobs out of 11,000 would be lost in the Italian group, the statement said.

On Friday the Franco-Dutch airline unveiled its formal bid for Alitalia, which it said would be conditional on union support, after eight weeks of negotiations.

Alitalia management was expected to seek the opinion of the economy ministry as the Italian state holds a 49.9 percent stake in the financially-strapped airline.

Air France-KLM have offered a deal valuing each Alitalia share at just under 10 euro cents, a very low figure given that the shares were quoted on Friday at 0.53 euros.

The deal proposes to swap one of Air France-KLM shares for 160 Alitalia shares, which would give the Italian airline a value of at least 140 million euros (218 million dollars), the statement said.

Three months ago, when the negotiations were launched between the two groups, there were unconfirmed press reports of an offer of 35 euro cents. Since then shares in the near-bankrupt Alitalia have plunged.

The Italian company also accepted the public offer of an acquisition of 100 percent of Alitalia convertible bonds, at a unitary price of 0.3145 euro, for a total of 608 million euros.

The board went on: The contract is not immediately applicable as it is subject to several suspensive conditions which must all be validated by March 31, 2008.

Source: Transportweekly