Shares soar in Norwegian as Lufthansa mulls bid

By Pádraig Hoare

Shares in Norwegian Air soared almost 14% yesterday after German carrier Lufthansa became the latest to be linked with a bid for the low-cost, long-haul airline.

Norwegian launched Cork’s first ever transatlantic flight to Providence, Rhode Island on the US east coast last July. It was quiet about Lufthansa’s confirmed interest.

Lufthansa chief executive Carsten Spohr said his company was in takeover discussions with Norwegian, raising the possibility of a shootout between rival interested parties.

Lufthansa has been in contact with Norwegian and whether an agreement is reached will depend on the price on offer and the strategic value the purchase would add for the German carrier, said Spohr.

Potential restrictions by cartel authorities will also be a factor, he said.

Aer Lingus owner International Airlines Group (IAG) has been rebuffed with two bids, Norwegian said in recent weeks, claiming they did not value the company highly enough.

IAG, which also owns British Airways, Iberia and Vueling, bought 4.6% in Norwegian in April, and while boss Willie Walsh said his firm remains interested in the low-fares airline, he said IAG would not become involved in a bidding war.

A spokesman for Norwegian said the firm had no comment on Lufthansa’s interest, only confirming it has “received enquiries from several parties”, adding that it affirmed the airline’s business model.

Norwegian has racked up heavy costs in recent months. It said in April that it was suspending its year-round routes such as Cork, Shannon and Edinburgh to Providence for the winter months, instead concentrating on the March-October schedule for 2019.

This is despite a sustained effort by political and business leaders in Cork, who heavily lobbied the White House for a licence to be granted to Norwegian to operate its transatlantic flights, including the history-making Cork route.

Founder and chief executive of Norwegian Bjorn Kjos said at its annual shareholders’ meeting last month that “at the right price, anything is for sale”.

Additional reporting Bloomberg

 

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