London - International Airlines Group said it was considering its options over its proposed takeover of Vueling after the Spanish budget airline recommended shareholders reject IAG's offer.
The board of Vueling said on Thursday that IAG's 7 euros per share bid did not reflect the airline's true value.
“We will reflect on Vueling's announcement and provide an update in due course,” an IAG spokeswoman said on Friday.
IAG, which already owns 45.85 percent of Vueling as well as British Airways and Iberia, offered in November to buy the rest of Barcelona-based Vueling in a bid to stem its losses in Spain and shake up its short-haul business in the country.
The offer represented a 28 percent premium at the time, but the share price of Vueling has since soared as the low-cost carrier's market share in Spain has grown and it posted a 300 percent jump in 2012 net profit.
Shares in Vueling, Spain's second largest carrier by passenger numbers, were up 4.3 percent at 8.19 euros by 12:10 SA time, valuing the group at around 245 million euros ($320.5 million).
IAG's shares were 0.8 percent up at 243.4 pence.
IAG said last month it had ruled out raising its bid for Vueling, although it could waive the initial condition it set of a minimum acceptance of 90 percent of non-IAG shareholders.
Vueling shareholders have until April 8 to say whether they will accept the offer. - Reuters