SAO PAULO--Brazilian low-cost airline Gol Linhas Aereas
Inteligentes (GOLL4.BR) jumped in Monday trading after a report
that it was in preliminary talks with Qatar Airways for a possible
takeover of the struggling Latin American airline.
Shares of Gol, Brazil's second-biggest airline by market share,
rose 10% to 10.32 Brazilian reais ($5.09) at 1430 GMT in Sao Paulo
trading, after rising as high as BRL10.47.
Veja magazine said over the weekend that Qatar executives met
with Gol officials last week to discuss a possible takeover.
Because Brazil restricts foreign ownership of domestic airlines,
Qatar was seeking to structure the takeover in a form similar to
that used in the takeover of Tam by Chile's Lan to form Latam
Airlines Group (LAN.SN), Veja reported, without saying where it got
the information.
Lan formed a holding company to take control of Tam in June, but
the two companies have kept some operations separate.
When reached by Dow Jones Newswires, Gol said it doesn't comment
on market speculation, and said it would communicate to securities
regulators whenever it undertakes negotiations. No one was
immediately available at Qatar Airway's press office in Sao Paulo
or in Qatar.
"The industry is weak the world over because of the global
economic crisis, and so the stock is taking off on speculation that
Gol could find a partner in Qatar Airways," said Pedro Galdi, chief
analyst at brokerage SLW Corretora in Sao Paulo. "Gol undertook a
series of deep reforms, reducing flights, and the second quarter
showed that improvement would come in the longer term. So anything
that comes up, even if it's speculative like this, will move the
stock."
Qatar Airways and Gol signed a mileage-sharing agreement in June
of this year that allow passengers of both companies to accumulate
frequent-flier mileage. Gol has said it may sell shares of its
frequent-flier program, Smiles, in an initial public offering,
possibly as soon as next year.
Gol had fallen 25% this year--from a close of BRL12.44 on the
last trading day of 2011--before Monday's surge. After rapid
expansion in previous years led to declining profitability the
company has been cutting down on flights to restore yields. As a
result, the market share of Gol, which is currently in the process
of taking over rival WebJet, fell to 38% of domestic flights, down
from 43% at the end of last year.
Meanwhile, the company's gross debt jumped 30% on the year to
end the second quarter at BRL5.2 billion, or 16 times Gol's
earnings before interest, taxes, depreciation, amortization and
rent, or Ebitdar.
Write to Paulo Winterstein at
paulo.winterstein@dowjones.com