Ita, acceleration on sale: waiting for close with Lufthansa

In force dpcm that traces a new route for the sale

There new course of the privatization of Ita Airways is traced and now the word passes to Lufthansa, the potential buyer in pole position. Yesterday’s publication of the dpcm in the Official Gazette with the new stakes for the sale of the airline to 100% of the Treasury sets the conditions for giving a change to the dossier, which had been pending for months awaiting a solution. The road map contained in the decree now fully reviews the procedures for divesting the shareholding of the Ministry of the Economy in Ita to “accelerate the definition of partnerships that ensure the pursuit of the objectives of industrial development and the strengthening of Ita’s activities”.

From the sale of a majority stake, envisaged by the previous Dpcm launched in February by the Draghi government, with the maintenance of a minority stake held by the MEF, it is now expected that the operation, carried out with direct negotiation, “can be carried out in stages, without prejudice to the recognition at each stage of the Ministry of the Economy and Finance of adequate powers to oversee the pursuit” of the set objectives. Furthermore, “taking into account the breadth of the research already carried out on subjects potentially interested in the acquisition and considering that the reference market scenario has not substantially changed”, the procedure is limited “to subjects who have already participated in the procedure for purchase of a stake in the capital of Ita Spa and who are able to acquire an initial stake in the Ita company of such an amount as to confirm the seriousness of the commitment as well as to subsequently acquire control or the majority of the capital”. Another fixed point established by the dpcm is that “even following the outcome of subsequent acquisition and sale operations, the majority of the capital of Ita Spa is still held by an airline”.

In fact, “the offerors must necessarily include an airline which must acquire the majority of the capital involved in each phase of the operation” and the offeror must guarantee that even on the date of the MEF’s exit from the capital, the majority of capital of Ita is held by an airline.

As for the purchase price of the investment, this takes into account the value of Ita’s shareholders’ equity, as shown by the company’s financial statements, interim financial reports and year-end estimates produced by the company. Due to the company’s development objectives, the acquisition of the equity investment can be represented, in whole or in part, by the purchaser’s subscription of one or more capital increases, including reserved ones, approved by Ita.

Furthermore, the Mef will initiate exclusive negotiations with the subject or subjects identified to define, also with the participation of Ita, “the industrial plan for the development and growth of Ita Spa, with particular attention to the development of national hubs, entry into strategic and to the increase of long-haul routes”. The MEF will have to be recognized “adequate powers of control over the management and the right to approve new shareholders” and “oversight mechanisms by the Ministry of the Economy and Finance will have to be adopted on the decisions relevant to the pursuit of development objectives and strengthening of Ita”.

Having redefined the framework of the rules of the game, the word now passes to the potential buyers. In light of the fundamental requirement of an airline’s dpcm, the spotlights are on Lufthansa, which, over the years and various privatization attempts, has never hidden its interest in the old Alitalia first and then in Ita. Interest, it should be remembered, that for the old company it was under precise conditions, that is, of a leaner company restructured by the Italian State. And the young Ita seems to meet these requirements.

Last January Lufthansa stepped forward with MSC, the group headed by shipowner Aponte, which then took a step back. In the field was the US fund Certares together with Air France KLM and Delta. At the end of August the choice of the Draghi government to start an exclusive negotiation fell precisely on this consortium. Negotiations that ended in stalemate and now the requirement of the airline set by the new dpcm seems to cut off the American fund.

Lufthansa entered the ITA data room last November. Ita, several times in recent weeks, has confirmed that the interlocutions are proceeding in a positive way. Now the proposal is awaited which, once positively evaluated by the MEF and the Ita board of directors, could kick off the stringent phase in the coming weeks. Among the hypotheses, there is the one that the German giant could enter with a 40% stake and then go up to 100%. With the acquisition of Ita, Lufthansa expands its constellation in European companies after the acquisition of Swiss, Austrian Airlines, Brussels Airlines and Air Dolomiti and above all places a fundamental element on the southern front in its strategy of a hub in the Mediterranean.