TPG keeps eye on Alitalia

By Jeffrey Goldfarb

LONDON (Reuters) - TPG re-opened the door on Thursday for a possible Alitalia (AZPIa.MI: Quote, Profile, Research) bid if Italy relaxes the auction rules, just hours before Spanish carrier Iberia (IBLA.MC: Quote, Profile, Research) invited the buyout firm to look at its books.

TPG (TPG.UL: Quote, Profile, Research) told the Italian government it remains interested in buying Alitalia, but wants the freedom to talk to unions before making a binding offer as suitor Air One has been doing, among other changes to the sale process, people familiar with the situation said.

Meanwhile, the Iberia board agreed to show detailed financial information to TPG with certain conditions after the private equity firm last week set an end-July deadline to receive a response to its 3.60 euros a share offer, which values the carrier at 3.4 billion euros ($4.69 billion).

Iberia said it wanted TPG to sign a confidentiality agreement, but added the decision to open its books did not mean it favored the offer price.

Sources had previously said TPG was unlikely to buy both airlines.

Alitalia shares jumped as much as 5.1 percent on the news, and were up 3.9 percent at 0.82 euros at 1431 GMT. Iberia's also surged 3.4 percent to 3.67 euros on market hopes of a rival bid to TPG's.

Alitalia's market capitalization is about $1.5 billion.

TPG pulled out of the auction for the struggling Italian airline in May because it was unhappy with the auction rules.

It told a government official at a meeting on Wednesday it remains interested, but only if can bring in local partners and have some flexibility on changing routes, said the sources, who asked not to be named