UPDATE 1-Shares in Chile’s LAN jump on merger plans

(Adds analysts view and background on proposed merger)

SANTIAGO, Aug 16 (BestGrowthStock) – Shares in Chile’s dominant
airline LAN (LAN.SN: ) (LFL.SN: ) jumped over 14 percent in early
Monday trade before sharply paring gains, following a merger
proposed on Friday with Brazil’s TAM (TAMM4.SA: ) (TAM.N: ).

Both companies announced on Friday a proposed merger via a
$2.7 billion all-stock transaction, which would create Latin
America’s top carrier and the No. 11 in the world in terms of
passengers carried. [ID:nN13221392]

LAN, which has already gained 60 percent in value so far
this year, is seen climbing further as the carrier may benefit
greatly from Brazil’s booming air travel market.

“This is positive news for LAN because it secures its
much-awaited entry into the Brazilian market with the help of
an experienced partner,” Bice Inversiones brokerage said in a
report to clients.

Shares in LAN were up 2.52 percent at 10:01 am EST (1400
GMT) at 14,200 pesos.

Banchile Inversiones set LAN’s share target price at 16,450
pesos for 2011, seeing a slowdown in gains after a steep climb
in 2010. LAN shares soared 7.7 percent on Friday alone as news
leaked of the planned merger, prompting the local bourse to
halt its trading.
($1= 509.40 Chilean pesos)
(Reporting by Brad Haynes and Antonio de la Jara; Editing by
Gerald E. McCormick)

UPDATE 1-Shares in Chile’s LAN jump on merger plans