German flag-carrier Lufthansa's supervisory board has approved a bid to acquire the entire share capital of Austrian Airlines.

Lufthansa will initially pay just €366,000 ($463,000) for the 41.56% share of Austrian held by the state company OIAG.

But it will pay a further sum of up to €162 million, through a debtor warrant, depending on the future performance of Austrian and the Lufthansa share price.

Lufthansa will move to acquire the entire free-float share capital of Austrian and expects to offer €4.44 per share for the outstanding stock.

This means Lufthansa will offer some €215 million to private and institutional free-float shareholders.

"Our bid is fair," says Lufthansa chief Wolfgang Mayrhuber. "It takes the interests of all those concerned into account and shares the encumbrances and risks fairly."

The German carrier says it must hold 75% of the total Austrian share capital by the end of the regular acceptance period for a public takeover.

OIAG's supervisory board is to meet on 5 December to approve the proposed transaction, which will then be subject to contract signature, anti-trust clearance and approval of a €500 million restructuring grant from the Austrian Government.

Source: Air Transport Intelligence news