TPG-consortium drops Alitalia bid

The TPG-led consortium has pulled out of the bidding for a minority stake in Alitalia as sources close to the deal blamed government regulation for making it impossible for the consortium to takeover the company.

The consortium led by US buyout firm TPG has pulled out of the bidding for the Italian government’s stake in Italian airline Alitalia.

US asset management group Matlin Patterson and Italian bank Mediobanca were also members of the consortium which issued a statement saying it was not “in a position to comply with all of the requirements” of the government’s sale process for its Alitalia stake.

A banking source said: “TPG wasn’t allowed to change the structure of its consortium to have 50 percent involvement by domestic companies and it needed to respond to requirements that Alitalia had to be Italian owned for the next eight years.” 


Alitalia: the troubled airline has lost a bidder

Bidders had to submit offers before a July 2 unconditional deadline with a bond provided of €50 million ($67 million). The source said Alitalia is “a real basketcase” and the consortium would not have been able to complete its due diligence in time.

The Italian treasury said earlier this month the procedure the bids must follow should include the company’s plans to revive Alitalia. The government is planning to sell a 39.9 percent share and would consider selling its full stake according to media sources.
Russian airline Aeroflot and Italian bank Unicredit are still competing with the parent company of Italy’s second-largest carrier Air One, AP Holding with Italian bank Intesa Sanpaolo.
Alitalia shares dropped to their lowest point in 2007 falling by 3.25 percent to €0.83 per share at 1457 CET.
This is a second high profile airline bid that TPG has abandoned this month, after the Macquarie-led consortium failed to acquire sufficient shareholder acceptance of its bid. TPG has also partnered with British Airways and three Spanish firms in an attempt to acquire Iberia and it is currently waiting for the airline to open its books.