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Austrian Airlines up on Lufthansa hopes

Shares in Austrian Airlines surge 18% to €3.10 following Austrian state holding company OeIAG’s statement on Thursday that Germany’s Lufthansa is now the exclusive bidder for the airline and a deal could come within a month.


Investors hope Lufthansa will make a buyout offer for minorities at the six-month average price, which currently stands at €4.15. “The market is speculating on a Lufthansa buyout offer to the free float shareholders,” says one trader. “Therefore buying at €3 or so is interesting.”

Lufthansa is now the exclusive bidder for state-controlled, loss-making Austrian Airlines and a deal could come within a month, OeIAG said on Thursday. A bid by Russia’s S7, the last one competing with Lufthansa after Air France-KLM dropped out of the race last month, did not comply with the rules of the tender, OeIAG said in a statement.

The company is now in talks to structure the deal in a way that complies with European Union competition rules. This is necessary because Lufthansa is offering only a nominal amount for OeIAG’s stake and also demands that it assume around half of AUA’s €900 million ($1.12 billion) debt. OeIAG CEO Peter Michaelis said he expected the deal to be decided upon at OeIAG’s supervisory board meeting on December 5, and signed within a month. (Reuters)