Texas Pacific Group flys up, up and away to Italy

Posted Jan 30th 2007 1:10PM by Tom Taulli
Filed under: Private Equity

Apparently, the United States is not the only country with money-losing airlines. Take a look at Italy's largest carrier, Alitalia SpA. The company hasn't seen profits since 2002.

Yet, it doesn't seem to be an issue for a buyout. In fact, the company has received 11 offers (the current value of the company is about $2 billion).

One of the bidders is the Texas Pacific Group , which is a mega private equity firm. Actually, the firm has a long track record with airline deals, such as with the turnaround of Continental (NYSE:CAL) as well as the recent purchase of 37.5% of Qantas.

However, TPG takes a scalpel to its buyouts. This could be a problem given Italy's tough unions.

The company's biggest owner is actually Italy. In other words, it may be a sign that the government is finally willing to get tough.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Tags: Alitalia SpA, AlitaliaSpa, Continrntal, Quantas, Texas Pacific Group, TexasPacificGroup