British Airways’ potential bid for Norwegian just hit a major snag

A potential takeover of Norwegian by British Airways might not be happening any time soon!

The budget airline confirmed that BA’s owners IAG Group had set out two conditional offers in a bid to take 100% acquisition – but that it rejected both of these as it felt that the company had ‘undervalued’ Norwegian’s prospects.

A statement from Norwegian read: "The Board of Norwegian Air Shuttle (NAS) confirms that it has received two separate conditional proposals from IAG Group in relation to an acquisition of 100 percent of the share capital of NAS.

"These proposals were reviewed in conjunction with NAS’ financial and legal advisers, and were unanimously rejected on the basis that they undervalued NAS and its prospects.

The Board of NAS remains fully committed to delivering on its stated strategy, for the benefit of all NAS shareholders."

However, that’s not to say that the discussions are necessarily over completely.

In April, IAG acquired a 4.61% ownership of Norwegian, in a bid to open up discussions with the airline which could include a ‘full offer for Norwegian’.

Just because the initial proposals have been rejected doesn’t mean that they won’t necessarily revise the offers.

In fact, the company confirmed that it is "currently considering its options in relation to Norwegian".

The full statement said: "On 12 April 2018, IAG announced that it had acquired a 4.61 per cent ownership position (minority investment) in Norwegian Air Shuttle ASA (Norwegian).

"The minority investment was intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian.

"IAG confirms that it has had contact with the Norwegian Board regarding a possible offer, without reaching an agreement. IAG is currently considering its options in relation to Norwegian."

The news comes as IAG celebrates a strong first quarter, announcing an operating profit of €280 million before exceptional items.

It’s no surprise that Norwegian has caught the group’s attention – after all, in recent years it’s firmly established itself as a force to be reckoned with in the aviation industry.

With UK routes to the USA from £129 each way, it offers competitive fares, not to mention it recently launched the UK’s cheapest direct flights to Chicago as part of its ongoing expansion.

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