The board of Spanish low-cost carrier Vueling has justified its decision to recommend shareholders reject a takeover offer from International Airline Group, after asking Banco Bilbao Vizcaya Argentaria (BBVA) and Nmas1 Corporate Finance to provide an estimation of the Vueling share price.
Documents released to the Spanish stock market regulator show audit company Nmas1 saying on 5 March: "As of today the €7 ($9) price per share offered by IAG is inferior to the rank of reasonable valuation estimated by Nmas1 Corporate Finance."
BBVA wrote in its report on 7 March that the offered price is from, a financial point of view, non-equitable for the shareholders of Vueling.
Although none of the auditors provided a valuation for the Vueling's share, the carrier says that an average estimate from analysts "clearly showed a superior valuation" of the share.
"The price offered, which supposed a 27.97% premium when it was announced, has been surpassed in such a way that the trading price is now higher than the offer, with no premium for the increased control," the board wrote to the Spanish stock market regulator.
The Vueling board recommend shareholders do not accept the takeover offer, saying it "negatively values the takeover offer formulated [by IAG]. The Vueling share closed at €7.85 on 7 March.
IAG, which already holds a near 46% stake in the airline, late last year launched its offer to acquire the remainder of the Barcelona-based carrier. Vueling shareholders have until April 8 to decide whether to accept the offer or not.
According to the documents, IAG would finalise the purchase of the remaining 54.15% in Vueling for €113.3 million, financing the acquisition with a loan from Banco Santander.