Barcelona-based low-cost carrier Vueling has unanimously recommended that shareholders accept an improved takeover offer of €9.25 ($12.10) per share from International Airlines Group (IAG).
IAG, which already owns 45.85% of Vueling as well as British Airways and Iberia, last month raised its bid by almost one-third after a previous offer of €7 per share was rejected.
“The board of Vueling recommends shareholders accept the improved offer for the following reasons: the price is reasonable and within the valuation issued by experts and from a strategic point of view the deeper integration of Vueling in IAG will offer advantages and opportunities,” Vueling said in a notice sent to stock exchange regulator CNMV.
IAG CEO Willie Walsh was quoted by Reuters as saying IAG would not merge Vueling with Iberia if its takeover bid was successful. He said the profitable Vueling business would operate separately from loss-making Iberia after the takeover.
IAG, which is trying to lay off more than 3,000 workers and cut salaries at Iberia to return the unit to profitability, could use Vueling to boost its short-haul business and compete with cheaper operators, according to Reuters.