Unions 'threaten' Alitalia takeover
Air France KLM-Group Chief Executive Officer Jean-Cyril Spinetta said the company's offer to buy Alitalia SpA is "at risk" because of union opposition to the plan. Shares in the Italian carrier fell more than 20 percent for a third day.
Alitalia dipped 21 percent to 20 cents in Milan trading and has plunged 60 percent since March 14 when Air France presented the offer valuing the carrier at 139 million euros, or 10 cents a share. The bid was 81 percent less than Alitalia's share price at the time.
Spinetta is "still confident" an agreement can be reached, he told news agency Ansa. The remarks were confirmed by an Air France spokesman. His comments came after Alitalia's main unions broke off talks after a meeting with Spinetta yesterday in Rome, saying it was "unlikely" they will continue talks.
Alitalia is "a hostage to labor unions that lobby for their own interests and not for the general interest of the carrier", said Niccolo Pini, who manages the equivalent of $1.3 billion at Banca Ifigest SpA in Florence. "Spinetta has no obligation to buy Alitalia even if synergies on some routes including Asia are attractive. The company is burning cash."
Alitalia had less than 300 million euros of cash and credit available at the end of January. The carrier is losing more than 1 million euros a day and has amassed more than 3 billion euros in losses in the past decade.
Air France has made gaining union support one of the main conditions for going ahead with the bid, along with securing backing of the current government and the new government, which will be chosen in elections next month.
Alitalia's main unions, Filt Cgil, Fit Cisl, Uiltrasporti, UGL Trasporti and Sdl, said an agreement is "difficult to reach", according to an e-mailed joint statement yesterday.
The Anpac union, which represents about half of Alitalia's 2,000 pilots, said the offer is "unacceptable", in a statement on its website after the meeting on Tuesday. The pilots' union, which had been the only one that had openly supported the Air France bid, has now reversed the position, criticizing the plan for ending Alitalia's cargo business.
Agencies
(China Daily 03/20/2008 page17)
