Aeroflot Willing To Buy Alitalia

[zEro.a1r]

Interesting development up there. I just wish someone thinks of buying/selling some shares in PIA...

Aeroflot Still In Running To Buy Alitalia - Forbes.com

LONDON - Russia’s Aeroflot and Italy’s Alitalia don’t have the best track records in the airline industry, but Aeroflot appears to be betting that they could do better together.

According to press reports in Russia, Aeroflot’s financial director, Mikhail Poluboyarinov, has said the purchase of Alitalia (other-otc: ALAIF - news - people ) is a “strategic” option for the company. The Russian daily Il Sole 24 Ore quotes him as saying that Aeroflot has found four banks that will guarantee 800 million euros ($1.1 billion) to fund the purchase.

Russian state-owned Aeroflot, in partnership with Italian bank UniCredit, is one of the three companies still in the bidding war for the ailing Italian airline. The others are AP Holding, the owner of Italy’s Air One airline and an alliance of Matlin Patterson Global Advisers, Texas Pacific Group and Italian investment bank Mediobanca (other-otc: MDIBF - news - people ).

Purchasing the Italian carrier would instantly give Aeroflot a sizeable presence in Europe without having to divert assets from its home market.

The Italian government, which currently owns 49.9% of Alitalia, wants to take its stake down to 10.0% and is taking offers until July 2. The government is hoping that the new stakeholder will inject life back into the ravaged carrier, which state aid has failed to do.

In related news, Aeroflot may be about to purchase 22 jets from Boeing (nyse: BA - news - people ), AFX News quotes a Russian daily as saying.

Shares in Alitalia closed up 2 euro cents (3 cents), or 2.1%, at 80 euro cents ($1.07), in Milan on Thursday.

Link: http://www.forbes.com/markets/2007/06/0 ... ets27.html