Brazil airline Gol increases offer to absorb Smiles

FILE PHOTO: A Boeing 737-800 airplane of Gol Linhas Aereas lands at Congonhas airport in Sao Paulo, Brazil November 5, 2018. REUTERS/Paulo Whitaker

SAO PAULO (Reuters) - Brazil airline Gol Linhas Aereas Inteligentes on Wednesday increased the premium paid to shareholders in its loyalty program Smiles Fidelidade in a proposed incorporation, according to a securities filing.

The new proposal offers 0.966 Gol share for each Smile share from a previous proposal of 0.825 share, increasing its offer by 17.1%, it said. Gol will pay Smile’s shareholders in both cash and shares.

Under the new incorporation proposal, Gol is offering 8.28 reais per Smile share plus 0.660 Gol preferred share or 21.68 reais plus 0.165 Gol preferred share.

Gol added the new offer has the support of 25% of Smiles minority shareholders, the airline added.

Gol owns more than half of Smiles and controls its board, but has faced stiff opposition from minority shareholders since it first proposed the merger in 2018. In recent years, Gol’s competitors, such as LATAM Airlines group and Avianca Holdings, have all absorbed their loyalty programs into their airlines.

Reporting by Carolina Mandl