TPG, BA withdraw bid for Spain's Iberia

By Elena Moya and Ben Harding

LONDON/MADRID (Reuters) - A consortium led by private equity group TPG TPG.UL and British Airways (BAY.L) said it has withdrawn its 3.4 billion euro (2.4 billion pounds) takeover bid for Spanish airline Iberia.

The consortium, also formed by Spanish investment firms Quercus, Vista Capital and Ibersuizas, "has arrived at the conclusion that it is not possible to make the bid under the terms of consensus and friendliness that we always thought indispensable to develop our project," the consortium said in a statement released on Monday night.

The announcement comes following "the decisions taken by core shareholders over the past few days," the consortium said.

Caja Madrid, a Spanish savings bank with 10 percent of Iberia, recently said that it planned to remain a shareholder of Iberia, showing an unwillingness to sell its stake to the possible bidders.

The Madrid-based savings bank then offered to buy two Iberia stakes on sale by BBVA (BBVA.MC) and Logista LOTA.MC. The purchase of BBVA's 7 percent and Logista's 6.4 percent in Iberia would leave Caja Madrid with 23 percent of the airline.

British Airways, which also has 10 percent of Iberia, said on Monday it would not exercise its right to share with Caja Madrid the stakes on sale.

"British Airways' position as Iberia's key industrial partner remains important and is not dependent on an increase in shareholding," British Airways Chief Financial Officer Keith Williams said in a statement.

"We will enter into discussions with Caja Madrid in order to maximise the value of our relationship with Iberia," he added.