Vueling stocks soar as IAG takeover flops

Shares in Spanish budget carrier Vueling surged on Friday after its board unanimously rejected a full takeover bid by Britain's International Airlines Group as being too cheap.

Vueling stocks soar as IAG takeover flops
Shareholders welcomed Vueling's decision to spurn IAG'S offer. Photo: Josep Lago/AFP

"The Vueling board has a negative assessment of the takeover bid made by the bidder because of the compensation offered, and recommends that shareholders do not accept it," the airline said.

"This report was unanimously approved by members present," Vueling, which is Spain's second carrier after IAG's Iberia, said in a statement issued late Thursday to the Spanish stock market regulator, the CNMV.

IAG, which already holds 46 percent of Vueling, lodged a bid December 11 to take over all the stock.

The group, born from a merger between British Airways and Iberia, offered to pay €7 ($9.20) a share, valuing Vueling as a whole at €209 million ($274 million).

Shareholders welcomed Vueling's decision to spurn the offer sending its shares up 38 cents, or 4.84 percent, to €8.23 in morning trade.

Vueling's board said a greater integration with IAG would "bring advantages and opportunities" to the airline but stressed that the bid offered no premium to the current stock market price.

Industry analysts generally agreed that the airline's share value was "clearly higher" than the IAG offer, Vueling said.

Vueling shareholders are to give their verdict at an annual general meeting in March or April.

IAG is slashing 3,800 jobs at loss-making Iberia in an attempt to cut costs.

Iberia workers are striking this week in the second of three five-day strikes, with many of them accusing the British firm of ruining a key Spanish asset.

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British TSB agrees takeover from Sabadell

TSB, a division of Britain's bailed-out lender Lloyds Banking Group, has accepted a £1.7 billion takeover from Spanish bank Sabadell, the pair said Friday.

British TSB agrees takeover from Sabadell
Photo: Carl Court / AFP

The two lenders have agreed terms on the bid which was pitched at 340 pence per share and worth €2.3 billion or $2.5 billion, they said in a statement.

"The boards of directors of Banco de Sabadell S.A. and TSB Banking Group plc are pleased to announce that they have reached agreement on the terms of a recommended cash offer for TSB by Sabadell," the statement read.

Lloyds, which is 23-percent state-owned after a bailout at the height of the global financial crisis, will sell its remaining 50-percent stake in TSB, which it floated on the London stock market nine months ago.

The deal means that investors who bought the stock at the offer price of 260 pence will receive a 31-percent premium.

The Spanish bank described the deal as "strategically attractive" and added that it marked a "continuation of Sabadell's successful growth strategy" to expand globally.

It said the acquisition would bring benefits through enhanced scale and a broader funding and capital base.

"Sabadell believes that the UK banking market, including the market serving UK retail and SME (small and medium-sized enterprise) customers, is attractive, having a well-defined and stable regulatory framework, consistent profitability and good future growth prospects."

It added that "TSB will be able to further enhance its growth strategy and efficiency, benefiting from Sabadell's resources, experience in SME lending and experience gained in the Spanish banking market".

The announcement comes one week after the Barcelona-based bank confirmed its takeover plans, sparking a surge in TSB's share price.

The offer represents a premium of 29 percent to TSB's closing share price on March 11, one day before the two groups revealed Sabadell had lodged an informal bid.