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Norwegian airline shares surge after Spanish newspaper Expansion has written about new takeover rumors. The newspaper, citing market sources, names the old suitor IAG and also the German Lufthansa as interested parties.

On Thursday morning, Norwegian's stock was up 3-4 percent, but quickly surged over 20 percent when the information began to be reported in the Norwegian business press.

Expansion writes that investors have taken a position to bid for Norwegian and refers to the fact that there have been several large transactions in the stock in recent weeks.

The crisis-stricken airline, which raised 3 billion Norwegian kroner in a new share issue at the beginning of the year, has long been surrounded by takeover rumors. In April last year, the takeover interest became concrete when British Airways and Iberia owner IAG announced that it had bought a stake in Norwegian with the aim of making a bid. However, in early 2019, IAG announced that interest had cooled and that it had sold its shares. 

Meanwhile, Norwegian's market capitalization has more than halved since IAG first showed interest and it is possible that IAG has changed its mind, writes Expansion. In addition, sources tell the newspaper that IAG may well have placed its old 3.93 percent stake with an intermediary, or that it has an option to quickly buy it back at a fixed price and without having to inform the market about it. 

IAG has not commented on any of the sources' information.

The London- and Madrid-listed company's room for maneuver may be extremely limited, however. British and Spanish securities regulations reportedly force IAG to wait six months before making a new takeover attempt. However, that rule is thrown out of play if another group gets in on the action first, writes Expansion.

Norwegian's shares have plummeted from prices above 100 Norwegian kronor to a low of 34.90 kronor on Wednesday. After the bid rumor in the Spanish press, the price traded up to over 44 kronor on Thursday afternoon.

Norwegian's head of communications Lassa Sandaker-Nielsen states in a comment to the Norwegian business newspaper Dagens Næringsliv that Norwegian can neither confirm nor deny the information.

”"We never comment on speculation," he writes in a text message.

In March, IAG CEO Willie Walsh told Dagens Næringsliv that he did not give much for the opportunity to come back with a bid for Norwegian at a later date.

”To be honest, I never want to say never. But it's not likely. If it had been an opportunity for us, we would have kept the shares. Instead, we sold. I'm glad we looked at this as an opportunity and I would have loved to have seen them on board. But it didn't work out.”

A week ago, Willie Walsh reportedly told Expansion that "nothing prevents IAG from acting, but there is no alternative on the table right now.".

Jacob Pedersen, aviation analyst at Sydbank, tells the news agency Direkt that it is not unexpected that IAG and Lufthansa are said to be interested. But he is surprised that speculation about a takeover has flared up so soon after the new issue, when the company is clearly working towards a turnaround. Although there is interest in buying Norwegian, he assesses the owners' interest in selling as "highly uncertain".

Brothers Bjørn and Tore Kjos, who own 17 percent of Norwegian through their holding company HBK Holding, have also expressed their desire to sell in interviews. Tore Kjos has also stated that ”Arab businessmen” have shown interest in his share of ownership.

Qatar Airways owns around 20 percent of IAG.

Source: di.se