[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Monday, 21 March, 2005, 11:34 GMT
Swiss shares frozen before talks
Swiss International aircraft
Swiss is yet to make a profit
Trading in Swiss International Airlines shares has been suspended in Zurich ahead of what analysts see as a likely takeover by Germany's Lufthansa.

The Swiss government - the airline's largest shareholder - is meeting on Tuesday to discuss the bid.

The state invested in the carrier after its formation in 2002 from the shell of collapsed airline Swissair.

A go-ahead will allow Lufthansa to make a 50 million euros ($66m; 35m) buy-out offer to small shareholders.

Swiss International, which is yet to report an annual profit, is worth about 500 million Swiss francs ($426m; 224m), based on current stock market capitalisation.

"The Swiss see it as a done deal," said the BBC's correspondent in Switzerland, Imogen Foulkes.

A takeover is being greeted with a mixture of "sadness and relief," she added.

"When the old airline went bankrupt it was a national tragedy.

"They have poured billions of dollars into it but it just hasn't done well and they know it can't continue like this."

Airport pledge

Swiss International has asked for its shares to be suspended from trading until Tuesday when the government will inform the carrier of its decision.

The boards of Swiss International and Lufthansa are also due to hold meetings on Tuesday.

The government, Swiss banks, and the Zurich authority together hold around 50% of Swiss shares.

Corporate stockholders including UBS, Credit Suisse and Novartis, who have about 36% of the shares, are likely to receive a nominal sum from Lufthansa, having already written off their investment.

The government reportedly wants to secure a deal that guarantees the future of airports in Zurich, Basel and Geneva, and retain the Swiss brand.

Newspaper reports on Monday said Lufthansa would invest in two long-haul jets, creating new posts at the firm's Zurich hub, as part of any takeover.




SEE ALSO:
Decision on Lufthansa offer looms
18 Mar 05 |  Business
Lufthansa closes in on Swiss deal
14 Mar 05 |  Business
Lufthansa confirms Swiss talks
13 Mar 05 |  Business
Swiss 'not ready for merger deal'
11 Mar 05 |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific