Norwegian Air Shuttle chief Bjorn Kjos said on Friday that the low-cost carrier wasn't for sale and that he had not spoken to anyone from International Consolidated Airlines Group, IAG's holding company.
Just the day before, Anglo-Spanish IAG had revealed the purchase of a 4.6% stake in Norwegian, further stating its intention of starting talks with its rival, including on the possibility of launching an offer for the entire outfit.

Shares in Norwegian rose as much as 13% on Friday, adding to a 47% surge on Thursday, after investors got wind of the possible bid.

In a statement issued by the company, Kjos said: “The share price doesn't reflect the underlying value and things we do in the company. Norwegian has fantastic potential. I think it has been too cheap.”

Norwegian also clarified it had no prior knowledge of IAG's purchase of stock on the open market and that it had not discussed the matter with the British Airways owner.

“Norwegian believes that interest from one of the largest international aviation groups demonstrates the sustainability and potential of our business model and global growth,” said the company.

Commenting on IAG's latest moves, on Thursday Investec analyst Alex Paterson told clients: “In our view, IAG should be looking to expand its long-haul low-cost airline, Level, and acquiring Norwegian would expedite that. It would bring in 144 aircraft, an $8bn aircraft order book and slots at Gatwick Airport, as well as taking out a competitor.

“We are slightly surprised at the timing of IAGs announcement to take a 4.61% stake to establish a position from which to negotiate for a number of reasons: First, Norwegian is highly leveraged with net debt/ebitda of around 23.6x for FY18 and 13.4x for FY19e. Second, Norwegian only has 25% of fuel requirements hedged and therefore the rising oil price will cause downgrades, pushing the stock lower. And third, Norwegian brings with it Norwegian/European short haul business and plans to expand into South America from Argentina, which, if successful, IAG would no doubt withdraw from.

“Potentially, a sale of Alitalia to a consortium including AFKLM or Lufthansa is pressurising IAG into making a land-grab for other assets. Norwegian completed two equity raises in March raising a total of NOK 1.5bn (£138m). IAG is now giving credibility to Norwegian, which the company lacked before, and this may allow Norwegian to make further equity issues at a much higher price,” he concluded.