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Air France Prepares Bid for Spain's Iberia: Report

French-Dutch airline Air France KLM is planning to team up with two Spanish firms to bid for Spain's Iberia against a group led by private equity group TPG, Expansion newspaper said on Wednesday.

The Air France KLM offer would keep 51% of Iberia in Spanish hands, allowing the airline to keep flying certain routes in Spain and abroad, the newspaper reported.

On Monday, the head of Air France KLM, Jean-Cyril Spinetta, said the airline would not do a deal with Iberia or Italy's Alitalia unless it was "strongly creative" of value. In July, the airline said it might be interested in Iberia.

TPG, in a consortium with British Airways and Spanish firms Ibersuizas, Vista Capital and Quercus Equity, has been talking to Iberia management for months and has made an indicative offer of 3.60 euros a share.

Iberia stock closed at 3.25 euros on Tuesday.

Expansion said Air France KLM would bring on board two Spanish family investment vehicles -- Torreal, which belongs to Juan Abello, and Planeta, owned by the Lara family, the lead shareholder in Barcelona-based airline Vueling.

Planeta declined to comment. Torreal was not immediately available to comment.