British Airways turns back on Ibernia bid

LONDON, Nov. 27 (UPI) -- British Airways and its private-equity partner walked away from their bid for the Spanish airline Iberia.

The move of BA and TPG came after the airline turned down the chance to increase its stake in its Spanish rival, The Independent reported Tuesday.

Caja Madrid, a Spanish bank opposing British Airway's plans, said last week it agreed to buy out two investors in the Spanish airline, a move that would give it the ability to block the takeover and a stake of more than 23 percent. However, BA, which has a 10 percent stake in Iberia, had a chance to increase its holding by buying out two investors with a total stake of 13 percent, the British newspaper said.

Matching Caja Madrid would have cost British Airways roughly $353 million. The takeover bid was in the works for more than six months.

"British Airways' position as Iberia's key industrial partner remains important and is not dependent on an increase in shareholding," Keith Williams, BA chief financial officer, told The Independent. "We will enter into discussions with Caja Madrid in order to maximize the value of our relationship with Iberia."