OSLO (Reuters) - Norwegian Air (NWC.OL) is flattered by British Airways-owner IAG’s (ICAG.L) interest in making an offer for the budget airline, but has not decided whether to agree to formal talks, founder and biggest shareholder Bjoern Kjos said on Friday.
IAG, the owner of BA, Iberia, Aer Lingus and other airlines, said on Thursday it had bought a 4.6 percent stake in Norwegian and intended to initiate discussions, including on a possible offer, sending Norwegian Air’s shares up sharply.
Kjos, who is also Norwegian’s CEO, controls about a quarter of the company’s shares and said he had not yet considered selling his stake.
“Seen from the outside, IAG is a professional company, best in class,” Kjos told reporters at Norwegian Air’s headquarters. “We’re flattered by the interest.”
While Norwegian’s shares rose some 50 percent following IAG’s announcement, hitting a 15-month high, Kjos said the current level still did not reflect the company’s underlying value and business potential.
“I’ve not even thought of selling ... what’s interested me is to run the company, I’ve not thought about shares or a sale,” he added.
Other airlines had also expressed an interest in Norwegian over the years, the CEO said, although they had not bought stakes and he declined to name them.
A trailblazer of low-cost, long-haul flying in Europe, Norwegian has been leading the charge in the trans-Atlantic market where traditional full-service carriers like British Airways have historically made most of their profits.
Norwegian has already made its impact felt. British Airways and others have recently tried to compete more directly with Norwegian by introducing basic economy fares.
But Norwegian’s rapid expansion has also put it under pressure to control costs and shore up its balance sheet, leading it to raise $168 million in a March share issue.
Reporting by Joachim Dagenborg and Ole Petter Skonnord; Writing by Terje Solsvik. Editing by Jane Merriman