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AccorHotels looking at stake in Air France KLM

Paris

ACCORHOTELS said on Sunday that it was looking again at possibly buying a stake in Air France KLM, in which the French government has a 14.3 per cent holding.

AccorHotels said that over the past years it had held discussions with Air France KLM with a view to developing joint projects, including an acquisition of a minority stake.

"AccorHotels confirms having resumed its reflections on the matter, being at the very early stage of assessing the feasibility and potential terms and conditions which will be discussed with Air France KLM in due time," AccorHotels said.

"There is no certainty that these initiatives will lead to any agreement nor any form of implementation."

Newspaper Les Echos reported on Sunday that the government was considering selling its Air France stake and had received interest from the management of AccorHotels.

Air France and the French finance ministry declined to comment on Sunday, while KLM's chief executive Pieter Elbers also said on Monday, when asked about the matter, that he had no comment to make.

Air France KLM has been going through a management upheaval following the departure of CEO Jean-Marc Janaillac after staff rejected a pay deal.

French unions have staged 15 days of walkouts since February, demanding a pay increase after six years of pay freezes. The strikes have cost the airline around 400 million euros (S$623.78 million) this year. Its shares are down 50 per cent year to date to 6.98 euros per share.

Les Echos said the government was studying three options. The first one would be to sell the whole stake to AccorHotels. The second option would be a partial sale which would keep some state influence at the company.

A third option would result in a swap of Air France shares with AccorHotels, in which the state would get a stake in the hotel group. Shares as AccorHotels last stood at 47.6 euros.

Les Echos, citing unnamed sources, said the government would seriously look at a sale given that the management of AccorHotels had shown interest in the stake.

Les Echos also said that the government had not yet made a firm decision on what it plans to do with the stake. REUTERS

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