UPDATE 3-Lufthansa to buy 19 pct stake in JetBlue
(Adds JetBlue analyst comments from investor call)
CHICAGO, Dec 13 (Reuters) - Deutsche Lufthansa AG (LHAG.DE), Germany's national flag-carrier, will buy a 19 percent stake in low-cost U.S. airline JetBlue Airways Corp (JBLU.O) in a deal worth about $300 million, the two airlines said on Thursday.
The purchase marks the first major investment by a European carrier in a U.S. point-to-point airline.
The deal which requires approval from U.S. regulators, has the potential to bolster trans-Atlantic operations for Lufthansa and its global partners. But no specific areas of cooperation between JetBlue and Lufthansa were announced.
U.S. law currently caps foreign ownership of U.S. airlines at 25 percent.
JetBlue Chief Executive Dave Barger said the deal is "simply a financial transaction" for now.
"At this point in time it's strictly a minority investment and we'll see where the future takes us with exploring other opportunities," Barger said on an investor conference call.
Lufthansa said it will buy about 42 million newly issued shares of JetBlue, or 19 percent of JetBlue's equity after the issuance. The airline will pay $7.27 per share, or a total of about $300 million.
Barger said the Lufthansa investment would not change JetBlue's plans to remain a stand-alone carrier.
"From our point of view, our goal is still one of organic growth," he said.
Shares of JetBlue rallied as much as 25 percent earlier in the day on an unconfirmed press report of the deal. The stock pared gains and closed up 14.4 percent to $7.15 on Nasdaq after the confirmation.
The deal represents a 16 percent premium to Wednesday's closing price of $6.25 and allows a Lufthansa nominee to be appointed to the JetBlue's board of directors when the transaction closes.
One analyst said JetBlue's domestic route -- especially its strength in New York -- eventually could provide the foundation operational partnerships.
"This would be a strategic deal that would fill a gap in the Star Alliance," which is weak in the New York market, said Craig Jenks, president of Airline/Aircraft Projects Inc, a New York-based consulting firm.
The Star Alliance is a global airline partnership, of which Lufthansa is a founding member along with UAL Corp's (UAUA.O) United Airlines and US Airways (LCC.N). Continued...
