'No merger if share ratios are not right'
Willie Walsh, ceo of BA, today (January 23) said he would walk away from any merger with Iberia if the share ratio was not right.
He told a press briefing he would not accept an agreement which gave BA 53% of the new company and Iberia 47%.
"We would not do a deal on that level. I would not be prepared to go that way," he said.
Mr Walsh said the weakening of Sterling against the Euro was a factor in the adjustment of the ratio.
"This is something we have to come to terms with. The Euro has significantly strengthened against the pound and I would have difficulty in discounting that," he said.
"But a 53-47 ratio - I would not be prepared to go that way."
Mr Walsh said he thought Iberia's current share price was too high.
"We will look at that but I am clear that that ratio is unacceptable. I don't think the BA shareholders will accept that," he said.
"I am not all concerned about not doing a deal with Iberia. I have always said we would only do a deal if it makes sense. I would have no concern about walking away.
"We will only do the deal if the deal makes senses," he said.
Mr Walsh declined to say what ratio he would accept.
He said if the talks failed, it did not stop BA doing other deals in Europe. "There could be other options," he said.
Mr Walsh said that consolidation was only right if the deal was right.
He said that if consolidation was the only reason, BA could go out and get deals with a number of airlines in Europe but that would not be good for the carrier.
"But I think it is the right option for Iberia - not the only one but the best one," he said.
"I believe that the merger would be a better option by far than any other deal they could make, like with Lufthansa.
"If the deal is not right, I would have no hesitation in saying we will not do it."
Earlier in the briefing, Mr Walsh said the talks between BA and the Spanish carrier were again progressing well.
He said there had been a hold up while the Spanish studied the BA pension scheme and its legal and actuarial implications.
During this break, no other issues, including corporate governance of the new company were discussed.
But Mr Walsh said he would be meeting Iberia's ceo Fernando Conte next week in Madrid.
But he confirmed that previous hopes of concluding the deal by March were now dead and no new deadline for completion had been set.
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