Mexico family ups offer in Aeromexico bidding war

By Cyntia Barrera and Noel Randewich

MEXICO CITY (Reuters) - Mexico's wealthy Saba family raised its bid for money-losing airline Aeromexico to about $213 million on Tuesday in a heated bidding war with a group led by Citigroup.

Just hours after the Mexican government said it was close to accepting a $206 million bid by Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and its partners, the Sabas struck back, offering 2.33 pesos per share for the government controlled airline.

"It's not over until it's over. The last minute has 60 seconds," Antonio Franck, the Sabas's lawyer, told reporters earlier in the day when the family promised to make a new bid for Aeromexico AMEXICOA.MX.

Citigroup previously had the most money on the table, offering 2.2508 pesos per share. The government had said it would accept the Citigroup bid unless a better offer came in by Wednesday afternoon.

The Sabas are one of Mexico's wealthiest families, with holdings in real estate, textiles and pharmaceuticals. Their new offer, submitted to Mexico's stock exchange late on Tuesday, expires on November 14.

Citigroup was also offering $171 million in cash or 1.8686 pesos per share, plus warrants reflecting the future value of Aeromexico -- essentially a bet on whether the U.S. bank and its Mexican partners can make the airline profitable.

Shares of Aeromexico, which has been hobbled by high labor costs and competition from nimble discount carriers, surged 16.93 percent on Tuesday to 2.21 pesos, just below Citigroup's offer.

The government owns 62 percent of Aeromexico and its holding company, Consorcio Aeromexico, while the rest of the company is listed on the Mexican stock exchange.