Withdraws Bid After Weeks Of Bickering; Will Aeroflot Step
In?
Buon riddance. On Monday, Air France-KLM announced it
has formally withdrawn its takeover bid for Alitalia, after
negotiations with the beleaguered Italian flag carrier fell apart
over union protests.
A statement from Air France read the carrier "indicated to
Alitalia that the contractual arrangements announced on 14th March
with a view to launching a public exchange offer on Alitalia were
no longer valid," reports Agence-France Presse.
That decision comes after weeks of bickering over the future of
the Italian airline. As ANN reported, the Alitalia
board accepted a $1.17 billion takeover offer from Air France-KLM
last month. The takeover followed several attempts by the Italian
government to sell off its stake in the troubled airline, including
a failed auction involving just two bidders, Air France-KLM and
rival Italian carrier Air One.
The subsequent French takeover -- described as "hard to digest"
in one Italian editorial -- worked out to one share in Air
France/KLM for every 160 shares in Alitalia... a valuation of just
.10 euro per share in the Italian airline.
Investors weren't the only ones who felt slighted by Air
France-KLM's takeover plan. Unions demanded the buyers throw out
plans to fire some 2,100 Alitalia workers, as part of efforts to
streamline the hemorraging airline. That proved to be an unwise
move... as Air France-KLM sent its negotiating team home April 2,
and declared the deal all-but-dead.
Also on April 2, Alitalia CEO Maurizio Prato -- who had been a
fierce proponent of the Air France takeover -- suddenly resigned
out of frustration, reportedly calling Alitalia "cursed," adding
"only an exorcist" could save it. Despite the obvious hyperbole,
few in the industry were especially inclined to disagree with
him... but both sides did return to the table five days later, with
both Air France and the Italian government reasserting the purchase
offer represented the best hope for the struggling carrier.
Alas, those talks proved for naught... and once again, the
future of Alitalia appears bleak. There may be one last hope for
the airline, however... as last week, Italy's prime minister-elect,
Silvio Berlusconi, suggested Russia's Aeroflot as a potential
takeover bidder, as part of an international partnership.
At the moment, Alitalia reportedly loses as much as one million
euros a day. The carrier had about 170 million in euros in the bank
as of March 31, and the Italian government suggested this week it
might lend the airline as much as 150 million euros on top of that
to keep Alitalia out of bankruptcy, while it looks for another
bidder.
As they say in Italy (well, what the Babel Fish online
translator SAYS what they say in Italy) -- l'orologio sta
muovendosi.
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