British Airways-owner IAG said it had been unable to reach agreement on a possible takeover offer for Norwegian after holding talks with the struggling airline's board, putting a dampener for now on M&A in the European airline market.
"IAG is currently considering its options in relation to Norwegian," IAG said in slides for a presentation on Friday. It bought a 4.6 percent stake in Norwegian in April with a view to starting takeover discussions.
Norwegian said in response it had received two proposals on a full takeover from IAG but had rejected them as undervaluing the company.
Releasing first quarter results on Friday, IAG stuck to a forecast for annual profit growth after announcing a 75 percent jump in quarterly profit, in results that showed it was striding ahead of rival Air France-KLM.
The jump in quarterly profit was boosted by favorable currency moves, plus higher ticket prices and better sales, helped by strong demand on its lucrative trans-Atlantic routes, and after its costs excluding fuel fell.
The improved earnings and reduced costs at IAG contrast sharply with those of rival Air France-KLM, which reined in profit and growth expectations for this year due to an ongoing series of costly strikes at its main Air France brand.
Shares in IAG gained 5 percent, while Air France-KLM shares slumped 5 percent in early trades.
Lufthansa Group also reported its best first-quarter operating margin in 10 years last week for its main Lufthansa brand thanks to robust demand.