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22 February 2024

Italy's Berlusconi backs rival bid for Alitalia

By Agencies


Silvio Berlusconi, tipped to become Italy's prime minister after April's vote, has suggested an Italian rival bid to Air France-KLM's offer for Alitalia could emerge, sending the stricken airline's shares soaring.

Political rivals dismissed it as election rhetoric, however, and the main financial partner for the purported rival bid by tiny Italian carrier Air One said it would be practically impossible to make an offer for Alitalia now.

The media tycoon said late on Wednesday as he left a birthday party that the French carrier would pull out and leave the field free to Alitalia's local rival to return with a new offer backed by banks, and possibly even by his sons.

"Even Greece and Portugal have a national airline; one can't just give up Alitalia," said Berlusconi. "I've been silent but I spoke when I saw the unacceptable [Air France-KLM] conditions. As they say in Rome, enough is enough."

Italy's top retail bank Intesa Sanpaolo, which backed an earlier bid from Air One, said it was not working on any offer for Alitalia and that it would be "unimaginable" to make an offer without conducting due diligence. Air One had no comment.

Italy's economy minister overseeing the sale said any interested bidder should make a formal offer now or risk derailing the long-sought deal with Air France-KLM.

Berlusconi, Italy's third-richest man, said on Thursday that neither he himself nor his holding company had any interest in bidding for Alitalia, which loses more than a million euros a day and is just a few months away from running out of cash.

He said he had contacted businessmen, but did not name any.

Sceptical politicians and one Alitalia union asked where the eleventh-hour rival bid was. Alitalia's chairman, talking to unions on Thursday, warned that any bid backed by banks would weigh on the near-bankrupt carrier's debt.

"If there were Italian businessmen capable of saving Alitalia, why didn't they come out earlier?" asked Berlusconi's one-time ally turned rival Pier Ferdinando Casini.

Berlusconi's comments further complicate Air France-KLM's plans to buy Alitalia, already in danger of falling apart due to a maelstrom of criticism from unions, politicians and Milan's airport operator SEA.

SEA refuses to drop a $2 billion lawsuit against Alitalia over plans to halve flights out of Milan's Malpensa airport.

The Franco-Dutch carrier has warned it will walk away if all obstacles to the deal are not resolved in two weeks, and wants the winner of Italy's election - who opinion polls suggest is likely to be Berlusconi - to sign off on it as well.

The stock market rejoiced. Shares in Alitalia were suspended in Milan in trading after investors bid about 60 per cent more than Wednesday's closing price. They later resumed up 10 per cent at 34 euro cents a share.



Privately owned Air One, whose 1 euro cent a share bid for Alitalia was overlooked by Italy's government in December in favour of the French bid, unsuccessfully challenged in court Air France-KLM's exclusive talks to acquire Alitalia.

But it has never officially given up the fight for Alitalia.

The Air France-KLM offer for the nearly bankrupt Italian airline values its shares at 10 euro cents each, but also includes a bond buy-back and a 1 billion euro capital increase.

Economy Minister Tommaso Padoa-Schioppa - speaking to Alitalia staff aboard a flight to Milan - once again raised the spectre of the government having to step in and appoint an official to run the airline if the Franco-Dutch deal fails.

"The timing, already extremely tight, is dictated by the company's condition and cannot depend on the political calendar," he said in a statement later.

Alitalia Chairman Maurizio Prato told unions at a Thursday meeting that the Franco-Dutch carrier's bid was essentially a "take-it-or-leave-it offer" - leaving little room for changes sought by unions and politicians.

The unions are angry at Air France-KLM's plans to slash or exclude from the deal nearly a third of the carrier's workforce, but plan to attend further talks with the carrier's CEO Jean-Cyril Spinetta on March 25, a union official said.

Despite the overall unhappiness with Air France-KLM's offer, the UIL Transport union dismissed Berlusconi's comments.

"It's better to go ahead with Air France-KLM," said Giuseppe Caronia, the union's secretary-general. "We can't take the risk of letting Alitalia go bankrupt."