Spanish bank Caja Madrid does not plan to sell its expanded stake in airline Iberia, a development analysts say could stunt a bid led by private equity firm TPG Capital.
Caja Madrid said it would buy a seven percent stake in the Spanish flag carrier belonging to fellow Spanish bank Banco Bilbao Vizcaya Argentaria at US$5.23 a share.
The purchase would make it the biggest shareholder with 17 percent, leapfrogging British Airways, which owns 10 percent.
Caja Madrid's swoop was the second piece of bad news in less than a week for the TPG consortium, a group that includes BA and three Spanish funds that made a $5.23 per share approach in March.
Gala Capital, the investment vehicle of Spanish billionaires Alicia Koplowitz, Manuel Jove and the Del Pino family, signalled it would make an offer at $5.23 to $5.68 per share with bank BBK and Air Europa owner Juan Jose Hidalgo.
Fortis bank analyst Manuel Zayas said Caja Madrid feared a foreign owner at Iberia could diminish the role of Madrid as Europe's main hub to Latin America and hurt both Caja Madrid and the regional government, which controls the bank.
Zayas said Caja Madrid pretty well controls the takeover situation and so they can avoid this risk. He said Madrid-Barajas airport is extremely important to the Madrid economy and Caja Madrid would prefer the airline to remain independent.
Complicating the issue for the TPG-British Airways consortium is Caja Madrid's frosty relationship with British Airways. Zayas said because TPG and British Airways want the support of the board and to do that they have to convince Caja Madrid, there may be no takeover in the end.
Caja Madrid chairman Miguel Blesa said the bank was not studying becoming part of a bidding consortium, although he did not rule out doing so in the future.
Meanwhile, British Airways is seriously thinking about stumping up more than $331 million for Spanish bank BBVA's seven percent stake in Iberia.
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