British Airways owner International Airlines Group PLC (LON:IAG) has had a takeover move rebuffed by Norwegian Airlines, the companies confirmed today.
IAG said it was considering its options, while Norwegian said in a statement that it had rejected two approaches from the BA owner as they undervalued its potential.
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Norwegian shares fell heavily on the news, though analysts said management may be hoping for a counterbid.
Neil Wilson, chief market analyst at markets.com, said: “Whilst the conditions of Norwegian still suggest it needs a bidder, on balance the rebuttal reduces the immediate likelihood of a transaction.
“At the same time, if IAG cannot get a deal done quickly it definitely raises the prospect of a counter from another suitor and a potential bidding war.”
“We also await to see if there are other suitors but if so this is less than ideal for IAG since it will be desiring to defend its transatlantic operations from further competition without abandoning its disciplined approach to such matters.”
IAG announced it had acquired 4.61% stake in Norwegian Air last month.
Shares in IAG today were up 5% to 671p after an upbeat first-quarter trading update that showed strong profit growth in spite of higher fuel costs.
IAG is the holding company for a number of European Airlines including British Airways, Iberia, Vueling and Aer Lingus. The most recent acquisition was Austrian airline Niki.