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January 11, 2005 2:00 am

Private groups enter exclusive talks with Amadeus

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Cinven and BC Partners, the UK-based private equity firms, have entered exclusive talks with Amadeus over a bid which values the travel IT and distribution company at about €4.3bn ($5.7bn).

The two groups, which linked up earlier this week to fight off bids from rival groups, tendered €7.35 a share for 100 per cent of Amadeus stock.

The sale of Amadeus, following six months of negotiations, would mark the largest leveraged buy-out in Spain, and would be only the second time that a Madrid-listed company was taken private. It would also be one of the biggest private equity deals in Europe.

Amadeus, which is the global leader in reservation systems for the travel industry, is 46 per cent controlled by Air France, Iberia Airlines and Lufthansa, which hold stakes of 23, 18 and 5 per cent respectively.

The deal is likely to be undertaken in two stages. First, an offer would be made to all shareholders and Amadeus would be de-listed. Air France and Iberia would then take stakes in the leveraged buy-out vehicle.

Amadeus shares were suspended in afternoon trade in Madrid. They have risen about 50 per cent since August, when news emerged of interest by private equity firms.

In November, Amadeus said it had short-listed groups, including a team comprising Carlyle of the US and CVC Capital of the UK. The other three were BC Partners, Cinven and Citigroup Venture Capital Partners.

A report last month in Börsen-Zeitung, the German newspaper, said Carlyle and Citigroup Venture Capital Partners of the US were close to agreeing a deal. It said they had offered €8.25 a share, a 40 per cent premium over the company's IPO price, fixed in 1999.

Amadeus late last year revised up its full-year profit forecast after reporting a 17 per cent increase in third-quarter net income.

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