Italian Rival to Make New Alitalia Bid

A promise of a new bid for the Italian airline Alitalia raised local hopes Monday for a reprieve for Malpensa airport outside Milan, where flight cuts threaten to reduce the airport’s reach just as the city bids to be host to the global Expo 2015.

Alitalia’s domestic rival, Air One, whose previous bid for the state’s stake of 49.9 percent in Alitalia was rejected, said that it would present a new offer soon. Alitalia is in exclusive talks until mid-March with Air France-KLM.

The Milan Chamber of Commerce said that it might back the Air One bid, which has the support of the biggest Italian retail bank, Intesa Sanpaolo. Air One is challenging Alitalia in court over the exclusivity of talks and will have a first hearing on Tuesday.

Air France-KLM backs plans for Alitalia to slash flights at Malpensa by 70 percent and use Fiumicino, outside Rome, as its only hub. Air One has said it would maintain Malpensa’s standing.

Shares of Alitalia rose 3.14 cents, or 4.75 percent, to close at 69.25 cents, against a rise of 0.55 percent in the overall index.

The company is discussing an all-share offer from Air France-KLM worth 35 cents a share. Investors are betting that either the bid will be raised or Air One’s rival bid will gain ground.

Talks with Air France-KLM were agreed to by the government before the resignation of Romano Prodi as prime minister began a political crisis, which looks likely to lead to an election. The opposition leader, Silvio Berlusconi, is the poll favorite.

On Sunday, Economy Minister Tommaso Padoa-Schioppa said that the sale would go ahead despite the collapse of the government and legal challenges from Malpensa and Air One.

On Monday, Economic Development Minister Pierluigi Bersani said that the connection between Alitalia and Malpensa had no market logic.

Bersani added that the government would have been “crazy” to be prejudiced against an Italian bid, if one existed. “If there are real proposals, they should be presented clearly and responsibly,” he said. “You don’t make proposals through the newspapers.”

The government has called a meeting on Malpensa’s future this week.

The airport operator SEA will seek $1.86 billion in damages from Alitalia over its plans to cut flights at Malpensa, which is about 40 kilometers, or 25 miles, northwest of Milan, Italy’s financial and fashion capital.

Outraged local politicians and business leaders entered the debate over the airport as Milan promoted its candidacy as host to Expo 2015.

“We are asking for a moratorium of at least two years,” said Luca Cordero di Montezemolo, head of the business group Confindustria. “Any other proposal would be unacceptable.”

“We have to watch out for an area of the country which represents the jewel of Italy in production, commerce and international relations, which is the north,” Montezemolo added.

Originally published by Reuters.

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