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Iberia Approached by TPG Capital about Takeover Offer

Spain's Iberia airlines said Friday it has received a takeover approach from U.S. private equity firm TPG Capital, formerly known as the Texas Pacific Group.

The flagship airline said TPG is studying the possibility of presenting a 3.6 euros-a-share ($4.81-a-share) bid for the company and has requested more detailed information on its finances.

TPG's all-cash bid is 10% below Iberia's Thursday closing price of 4 euros ($5.34) and values the company at 3.41 billion euros ($4.55 billion).

Iberia disclosed the information in a regulatory filing.

Iberia's share price was 3.99 euros ($5.31) at close of trading Friday on the Madrid stock exchange, down 0.01 euro.

TPG has agreed to analyze the information from Iberia within 30 days of receiving it, and then make its decision within 10 days after that.

Iberia said its board will meet in the coming days to discuss TPG's approach.

The agreement earlier this month between the European Union and the United States to eliminate many restrictions on airlines operating trans-Atlantic flights is expected to trigger a round of consolidation in the European airline industry.

Iberia is considered a likely takeover target, and the Madrid-based carrier has authorized its chairman to consider potential partnerships or other strategic options.

Iberia's shares have risen sharply in past months on hopes of a takeover. The stock is up almost 45% since the beginning of the year, and its market capitalization has risen to 3.8 billion euros ($5.07 billion).

Analysts say British Airways, which owns a 10% stake in Iberia, may also be forced to consider a bid for the Spanish carrier as a defensive move if a large rival airline decides to bid.

Under European Union law, companies registered outside the region cannot own more than 49% of companies within the EU.