Chile’s LAN Airlines decided to wait another 10 days to carry out a share swap with rival TAM after holdouts among the Brazilian carrier’s minority shareholders put a hitch in a takeover that will form Latin America’s largest airline.
LAN said it was removing a requirement of 95 percent approval among TAM shareholders after acceptance of the swap accounted for 94.4 percent of shares in circulation. The deal should not have trouble clearing the bar of two-thirds acceptance established under Brazilian law.
The number of holdouts surprised analysts, but they said it was not likely to derail the takeover.
“This is a technicality of the process, it’s a minor headache, but it does not impact the merger,” said Michael Linenberg, senior airlines analyst with Deutsche Bank Securities in New York.
Linenberg said inaction among minority shareholders might have complicated the process.
“They have got to find out where their shares are held, they could be in some grandma’s account somewhere in Brazil, deep in some vault, and they don’t even know they have the stock,” he said.
LAN said in August 2010 it planned to take control of TAM through an all-stock transaction worth an estimated USD$2.7 billion at the time.