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Has Virgin Australia found its white knight?

Virgin Australia Holdings Limited (ASX: VAH) might have found its white knight.

According to the AFR, sources have told the media outlet that billionaire Fortescue Metals Group Limited (ASX: FMG) chairman, Andrew ‘Twiggy’ Forrest, is aiming to form a consortium to buy the embattled airline.

The report claims that Forrest has formed a team to run the rule over Virgin Australia and has enlisted investment bank Credit Suisse for advice.

Virgin Australia is currently in voluntary administration as it seeks to recapitalise its business after failing to receive financial assistance from the government to help it through the unprecedented coronavirus crisis.

Though, any bid from Forrest is likely to be on the proviso that the government assists in some way. This may be through tax breaks or guarantees.

Mr Forrest and his investment company, Minderoo, have not commented on the speculation.

Other interested parties.

The iron ore magnate may not be the only one interested in acquiring Australia’s second largest airline. There are believed to be at least 10 parties considering a bid for Virgin Australia at present.

Other parties that could be looking at taking over the airline include a group led by Macquarie Group Ltd (ASX: MQG), and private equity firms BGH Capital, Bain Capital, Indigo Partners, and finally Oaktree Capital Management.

What else is happening?

Interestingly, Virgin Australia may not be the only airline taken over in the near term.

Earlier this month, analysts at Macquarie put together a comprehensive list of all the companies that conglomerate Wesfarmers Ltd (ASX: WES) could be interested in acquiring following the sell down of its stake in Coles Group Ltd (ASX: COL).

Amongst the 38 companies listed as potential acquisition candidates for Wesfarmers was Qantas Airways Limited (ASX: QAN). Though, its shares have since rallied notably higher, so this is looking increasingly unlikely now.

Maybe it will throw its hat into the ring for Virgin Australia instead.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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