Air France-KLM, Lufthansa submit sweetened bids for Portugal's TAP

By Reuters News

By Sergio Goncalves

LISBON, Sept 30 (Reuters) - Portugal's state holding company Parpublica said on Wednesday it had received improved binding offers from Air France-KLM AIRF.PA and Lufthansa LHAG.DE for a minority stake in flag carrier TAP, ahead of the government's expected pick of a winning bidder by mid-October.

The two airline groups were invited earlier this month to improve their offers after submitting initial binding bids in July for a 44.9% stake in TAP. A separate 5% stake has been reserved for employees, with the winning bidder entitled to snap up any shares staff decline to take.

Parpublica, which did not disclose details of the bids, will now assess the offers and prepare a report for the government.

Infrastructure Minister Miguel Pinto Luz has said a winner would be chosen by mid-October, to become the strategic partner of one of Europe's few remaining independent flag carriers.

The government wants TAP's future partner to bolster growth across Portugal's airport network, deepening operations and connectivity not just at the Lisbon hub but also in Porto, Faro, the Azores and Madeira.

TAP's chief attraction is its prized landing slots connecting Lisbon with Brazil, Portuguese-speaking Africa and the United States - routes that underpin Portugal's diaspora ties, tourism flows and investment links.

Air France-KLM Chief Executive Benjamin Smith said in a statement that he wanted to "elevate TAP's unique identity", adding that Lisbon would become the group's exclusive southern European hub.

"With the support of Delta Air Lines and our transatlantic joint ventures, TAP would connect to a network of more than 375 destinations, bringing Portugal closer to new cities, customers and opportunities across the Americas," he said.

Lufthansa said its proposal reflected its belief that it was "the best partner to support TAP's growth, strengthen its competitiveness and reinforce its role as Portugal's flag carrier."

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