Takeover talk heats up

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LONDON, England (CNN) -- The climate of airline takeovers is heating up. Ailing Italian carrier Alitalia and Australia's Qantas Airways has been the subject of takeover and merger speculation for months, but now Iberia is being lined up by a number of interested parties.

Private equity firm Texas Pacific Group made a $4.5 billion (3.4 billion euro) bid approach for the Spanish airline on Friday. It is a move that analysts say could trigger other bids for the oneworld alliance member.

Texas Pacific Group has some history in aviation and is credited with turning around Continental Airlines in the 1990s.

It is also part of a group finalizing an $8.7 billion takeover of Australia's Qantas Airways and is casting an eye over the books of troubled Alitalia.

"It's an interesting combination. [TPG founder] David Bonderman really knows his stuff and Iberia is a well-run airline. The main issue is whether it triggers expensive counter bids," Exane BNP Paribas analyst Nick van den Brul told Reuters.

Iberia's stock has risen by around 27 percent in 10 sessions, buoyed on hopes that an "open skies" deal liberalizing U.S.-European Union air travel will herald a round of mergers in the sector.

BA's stake

The bid has piqued British Airways interest in the airline, which already owns 10 percent of Iberia. BA's stake gives it a right of first refusal, putting it in a strong position to sink any bid.

If BA were to join TPG in a move on Iberia, it could help TPG sidestep limits on ownership of EU-based airlines by non-EU companies.

Another airline that might be interested is Germany's Lufthansa, Portuguese broker BPI said, although the German airline refused to comment.

Aeroflot in for Alitalia

A source close to TPG said it would continue to work on the bid for Italy's Alitalia, but would not own the two airlines at the same time.

If it were able to buy one, it would withdraw from talks to buy the other.

However competition for Alitalia has come from an unexpected source: Aeroflot of Russia.

The Russian airline has teamed up with UniCredit an investment banking firm.

"Aeroflot is really showing interest in this project. Talks on the issue have taken place. We've made an offer," the Russian company's deputy chief executive Lev Koshlyakov told Reuters.

Eleven suitors had originally expressed interest in buying Alitalia, but that number was whittled down to a shortlist of five. All non-binding offers are expected to be with the Italian Treasury by mid-April.

Reuters contributed to this report.

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