The airline group IAG's choice not to bid for Scandinavian Norwegian increases uncertainty for the low-cost carrier during an already difficult time.
Nordea NDA emphasizes this in an analysis update where the hold recommendation is repeated.
”"Due to the increased financial risk and the possibility of covenant breaches, we reiterate our reservations," Nordea writes.
Di's analyst Magnus Dagel has previously warned that Norwegian's savings package, which was presented on Christmas Eve, was a step in the right direction but that it will not be enough.
At the same time, Pareto reiterates its purchase of Norwegian and calls Thursday's price drop of just over 20 percent "irrational".
”"We believe that fundamentals and risks are largely unchanged while the market seems to have believed that IAG was the only option for Norwegian," writes Pareto.
The investment bank believes that Norwegian's board would have been more willing to reach an agreement if IAG had been the only option.
”"Despite everything, IAG's announcement came as a surprise, especially in the wake of recent statements from IAG's CEO and main owner," writes Pareto, who presents an ongoing bidding war in which IAG has not been granted exclusive rights to negotiate as an opportunity for them to now instead choose to sell their shares in Norwegian.
Source: di.se
