IAG says it will not increase bid for budget airline Vueling

MADRID Tue Feb 19, 2013 11:18am GMT

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MADRID Feb 19 (Reuters) - The International Airline Group says it will not raise its 7 euros per share bid to buy out shares in Spanish budget carrier Vueling despite shareholder pressure for a higher offer.

Spanish website El Confidencial had cited unnamed sources as saying that IAG would present an increased offer of between 7.5 and 8 euros per share in the coming days after several shareholders rejected the current bid.

"IAG is moving ahead with its 7 euros per share offer, as the company informed on Feb. 6," an IAG spokeswoman told Reuters by email on Tuesday.

IAG said this month that it had ruled out raising the 113 million euro ($150.9 million) offer for the 54.15 percent of Vueling it does not already own.

The bid represented a premium of about 28 percent to Vueling's share price when it was launched in November. Since then, Vueling's shares have traded as high as 8.10 euros and were up 3.23 percent at 8 euros on Tuesday morning.

El Confidencial said that solid earnings and share price performances from other European budget carriers, such as easyJet and Ryanair, could make a case for an increased bid for Vueling.

However, a higher offer could stoke further fury from workers at IAG-owned Iberia, who were staging the second of 15 planned walkouts on Tuesday to protest a deep cost-cutting plan.

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