Airline Stocks: Lufthansa to Buy Stake In JetBlue 0
The NYTimes blog DealBook is reporting that Lufthansa is in talks to buy a 20% stake in JetBlue Airways. I for one never expected JetBlue to be open to a sale, even for a portion of the company, to any airline, but it looks as if I’ve been proven wrong. An official announcement on the deal could be made as soon as the market closes on Thursday in New York.
JetBlue’s stock, which has been in the dumps as of late, was up as much as 35% on the news of the potential deal to almost $8.50. Why make this bid now? DealBook indicated it was because of the relative strength of the Euro against the Dollar, making the deal cheaper than ever before for Lufthansa. All of this still remains a rumor until an official announcement, but it seems quite possibly real to me.
Because Lufthansa is only taking a 20% stake in the company, they stay way below the foreign-ownership requirements for US airlines, something Virgin America has to battle when they started operations earlier this year. According to people familiar with the matter the investment would only be a passive one, but would not rule out some kind of partnership (read:code sharing agreement) in the future.
Via [DealBook]
UPDATE: The AP has confirmed this story. Lufthansa actually purchased a 19% stake in JetBlue for $300 million. This is based on a share price of $7.27 per share, or a 16% premium of JetBlue’s closing price Wednesday. Even more important, the two airlines said they would seek “an operation cooperation.” What this means was not elaborated upon, but more details will be forthcoming.