Norwegian Air Shuttle, the fast-expanding finances airline, says it has unanimously rejected two bid gives from the owner of British Airways.
International Airlines Group (IAG), which owns four.6% of Norwegian, is in search of to carry its market share amid competitors from low-cost carriers.
But Norwegian stated the proposals undervalued the agency and its prospects.
Shares in Norwegian initially fell as a lot as 10% on the information earlier than recovering barely.
By distinction, IAG was the highest gainer on London’s FTSE 100, up 5.6%.
News of the bids first emerged in an investor presentation by IAG, which additionally owns Spanish airline Iberia.
IAG was giving the presentation after it posted an enormous leap in working income for the primary quarter of 2018, thanks partly to robust demand over Easter.
Underlying earnings have been €280m (£247m) earlier than distinctive gadgets – up from €160m final yr. Revenue climbed 2.1% to €5bn.
IAG stated it had “had contact with the Norwegian board regarding a possible offer, without reaching agreement”.
In response, Norwegian issued an announcement confirming that it had acquired “two separate conditional proposals” from IAG providing to purchase the complete firm.
Norwegian Air has earned a reputation for its low-cost offers, akin to £99 one-way flights from Edinburgh and Dublin to New York.
However, it reported a web loss in 2017 and needed to increase recent funds earlier this yr to deal with its speedy growth and better gasoline prices.
Nevertheless, its transfer into low cost intercontinental flights has shaken up the market and compelled greater rivals akin to IAG and Air France to take measures to win again prospects.
IAG has already put a toe within the finances long-haul market with Level from Barcelona, whereas including European airport slots from failed UK airline Monarch.
“Norwegian’s finances may be stressed, but it’s playing tough,” stated Neil Wilson, chief market analyst for Markets.com.
“We be aware that it acquired curiosity from different events as soon as the IAG stake was revealed and this can be the rationale for it to squeeze as a lot as it could actually from a bidder, though ‘rescuer’ could also be extra acceptable.
“We now have the prospect of a bidding conflict for Norwegian, though it will depend on IAG’s urge for food to do a deal whether or not it ups its provide.”