Shares in Jet Airways Ltd surged for the fourth straight day on Friday to hit a near 5-month high, as a proposed acquisition of the debt-laden carrier by Indian conglomerate Tata Sons Ltd was likely to be inching towards a close.
The topic of acquiring Jet Airways will be discussed at the Tata Sons board meeting on Friday and the members may approve starting due diligence on the deal, a source familiar with the matter told Reuters.
However, a decision on closing the deal would certainly not be made during the meeting and nothing was final, the source said.
Jet Airways posted its third consecutive quarterly loss on Monday and said it was undertaking a review of its business to cut costs and boost revenues in order to stay afloat. The airline is seeking funds by raising equity and selling a stake in its loyalty programme.
For Tata, a deal with Jet Airways would help transform the group from being a fringe player in the country's airline industry into a dominant international carrier.
Tata's businesses range from IT services to car-making. In aviation, it runs the Vistara full-service carrier with Singapore Airlines Ltd and operates low-cost domestic carrier AirAsia India along with AirAsia Group Bhd.
The Indian government was not driving the deal as reported by some media, the source told Reuters, adding that Tata Sons is looking at it as a business opportunity.
Jet Airways' shares, down more than 61 percent this year as of Thursday's close, rose as much as 14.4 percent to 366.95 rupees on Friday — their highest since June 27 — after closing 25 percent higher in the previous session.
