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Airlines

Global Mergers and Acquisitions: A Sizzling Heat Wave

Strategic Insights

— 2 min read

Shares in British Airways shot up as takeover rumours swept the airline industry, driven by an offer for Qantas Airways from Macquarie Bank and Texas Pacific Group. This move was partly welcomed by BA shareholders, who had anticipated a potential bid from Qantas. Meanwhile, Air France-KLM and Alitalia announced exploratory talks about a possible takeover of Alitalia, sending corporate financiers scrambling to their spreadsheets. The mining sector also saw activity, with BHP Billiton and Rio Tinto rumored to be considering bids for Freeport-McMoRan Copper & Gold and Phelps Dodge, respectively.

Key Takeaways:

  • Shares in British Airways touched the symbolic 500p level for the first time in over five years, driven by takeover rumors and lower oil prices.
  • BA shareholders welcomed the Qantas offer as a potential relief, as the UK airline had been rumored to be interested in Qantas itself.
  • Air France-KLM and Alitalia announced exploratory talks about a possible takeover of the loss-making Alitalia, sending shockwaves through the industry.
  • BHP Billiton shares experienced their biggest two-day gain since June on rumors of a potential bid for Freeport-McMoRan Copper & Gold.
  • Freeport shares had their biggest two-day gain since June, boosted by the rumors of a potential bid.
  • Paddy Power, Ireland's largest bookmaker, is considering a bid for Talarius, owner of the Quicksilver chain of amusement arcades.
  • Dealers speculate that Paddy Power may be considering a counterbid to undermine an offer already on the table from European Gaming, a joint venture between Australia's Tattersall's and Macquarie.
  • Rumors of a possible bid for Scottish and Southern Energy sent shares higher last week, amidst speculation over which utility company will face a bid next.

Statistics:

  • Shares in British Airways reached the symbolic 500p level.
  • BA shares have been boosted by lower oil prices and slowing growth in available aircraft seats.
  • Freeport shares experienced their biggest two-day gain since June, with a 15.9% rise on October 13 and a 10.3% rise on October 14.
  • Paddy Power's near 10% stake in Talarius has sparked speculation about a potential bid.
  • The utility sector has seen a surge in takeover rumors, with Scottish-Power facing a bid from Iberdrola of Spain.

Sources:

  • "Shares in British Airways touch 500p as takeover tales sweep airline industry" - unattributed (location unclear, without date)
  • "BHP Billiton may be eyeing up bid for Freeport-McMoRan Copper & Gold" - unattributed (location unclear, without date)
  • "Paddy Power poised to make counterbid for Talarius" - unattributed (location unclear, without date)
  • "Rumours of bid for Scottish and Southern Energy lift shares" - unattributed (location unclear, without date)

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