Spanish airline Iberia slid 5 per cent to €3.26 as bid hopes were dashed when savings bank Caja Madrid moved to build its stake in the airline to 23.4 per cent, potentially blocking a foreign takeover.

Caja Madrid, which has said it would prefer to see Iberia remain in domestic hands to protect business in the Spanish capital, exercised pre-emptive rights Thursday to buy a 6.4 per cent stake from fellow shareholder Logista, the logistics arm of tobacco company Altadis.