International Airlines Group said it was considering its options over its proposed takeover of Vueling after the Spanish budget airline recommended shareholders reject IAG’s offer.
According to a Reuters report, the board of Vueling said on Thursday that IAG’s €7 per share bid did not reflect the airline’s true value.
“We will reflect on Vueling’s announcement and provide an update in due course,” an IAG spokeswoman said on Friday.
IAG, which already owns 45.85 per cent of Vueling as well as British Airways and Iberia, offered in November to buy the rest of Barcelona-based Vueling in a bid to stem its losses in Spain and shake up its short-haul business in the country.
The offer represented a 28 per cent premium at the time, but Vueling’s share price has since soared as the low-cost carrier’s market share in Spain has grown and it posted a 300 per cent jump in 2012 net profit.
IAG said last month it had ruled out raising its bid for Vueling, although it could waive the initial condition it set of a minimum acceptance of 90 per cent of non-IAG shareholders.
Vueling shareholders have until April 8 to say whether they will accept the offer.