Alitalia shares up during takeover talks
ROME—Shares for Alitalia rose sharply in Milan on Wednesday after Air France-KLM promised to revise job cutting measures in its bid to take over the ailing Italian airline.
The Franco-Dutch group, hoping to overcome opposition by unions to possible job cuts, has offered to hire 180 Alitalia pilots over the next three years and is expected to make its revised proposal later this week, union officials said Tuesday night after the latest negotiations on the deal.
In early trading on Wednesday, shares in Alitalia were up 14.6 percent at euro0.5 (US$.78) in Milan after briefly being suspended because of excess gains.
Alitalia's board was expected to meet later in the day in Rome.
Air France-KLM President Jean-Cyril Spinetta confirmed during a meeting with union officials at Alitalia headquarters on Tuesday that the revised proposal would be made by Friday, said Air France-KLM spokeswoman Veronique Brachet.
The pilots would be absorbed by Air France-KLM, an Italian pilots union official, Massimo Notaro, told Italian state TV. He called that proposal "unsatisfactory."
Other union officials said the new proposal also envisioned Air France-KLM absorbing hangar and some other ground operations at Rome's Leonardo da Vinci airport to reduce job cuts.
"A step forward has been made. The negotiation is really under way," another transport union leader, Roberto Panella, was quoted as saying by the Italian news agency Apcom. "We're waiting for the document that Spinetta has described as friendly."
Union officials said another meeting would be held either late Friday or Monday to discuss the new proposal. There was no immediate comment from Alitalia.
Spinetta said in a statement that the new plan would deal with the "social consequences" of Air France-KLM's industrial plan for Alitalia in a way that "no worker would be abandoned and a solution would be designed for each of the 2100 employees concerned."
The Italian government wants to sell its 49.9 percent stake in the airline, which is losing euro1 million (nearly US$1.6 million) a day. Economy Minister Tommaso Padoa-Schioppa warned recently that the company doesn't have a lot of time.
Alitalia's board already has accepted the Air France-KLM bid, which is valued at euro747 million (US$1.1 billion).
But unions have opposed it because of planned job cuts and the planned declassification of Milan's Malpensa airport as a hub. They also want a greater say in negotiations. The deal requires their approval, as well as the approval of Italy's next government, to be formed after mid-April elections.
The ANSA and Apcom news agencies quoted union officials as saying Spinetta had explained that negotiations would involve separate agreements with pilots, flight attendants and ground crews. Negotiations also would proceed separately for workers of two Alitalia branches, AZ Service and AZ Fly.
On Monday, Premier Romano Prodi urged unions to have a "sense of responsibility" when considering the Air France-KLM deal. He said that while the government would be open to other offers, it had received no serious alternative bids.
Conservative leader Silvio Berlusconi has insisted other Italian offers are in the works, but he has failed to provide specifics. He has said he would veto the Air France-KLM deal, if he wins the elections.
The Italian government had quickly agreed to the Air France-KLM deal, even though its bid valued the company, at the time of the offer, at a far-lower-than-expected euro139 million (US$214 million). Air France-KLM would also pay euro608 million (US$946.6 million) for convertible shares.
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AP Business Writer Emma Vandore contributed to this report from Paris.
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