Alitalia shares climbed sharply on Thursday after a regional administrative court ruled that there was no cause for the airline to suspend exclusive merger talks with Air France-KLM.
A suit asking that negotiations between the two carriers be suspended had been filed by Italy's biggest private airline Air One, through its parent company AP Holding, which also wants to present an offer for the Treasury's 49.9% stake in Alitalia.
Air One confirmed on Thursday that it will present an appeal to the Council of State, Italy's highest administrative court, to try and stop the merger.
The Italian government decided at the end of 2006 to sell most if not all of the Treasury's controlling stake in Alitalia.
After an attempt to auction Alitalia failed last summer, the government decided that Alitalia should find a buyer and with it negotiate the sale of the Treasury's stake.
Last December Alitalia's board unanimously chose Air France-KLM over Air One, the two remaining bidders, because it said it offered the best guarantees for the national carrier's future.
Air France-KLM, Europe's biggest airline, had been a front-runner from the start thanks to its size as well as the fact that it already owns a 2% stake in Alitalia, making it the second-biggest shareholder after the Treasury.
Wednesday night's ruling against Air One clears the way for negotiations to conclude with a binding offer for Alitalia by mid-March.
Air France-KLM President Jean Cyrill Spinetta will be in Italy neXt week to illustrate to unions and the government the outlines OF his company's offer.
Any offer for Alitalia will have to be approved by the Treasury and Air France-KLM has already said that it will seek the approval of both the current, outgoing center-left government as well as the one which will come out of the April 13-14 elections.
