Iberia is Spain's flagship carrier

Iberia said that TPG Capital had made a bid approach and asked to look at the company's books.

The offer values Iberia at 3.6 euros per share, less than the current price on the Madrid stock exchange.

An "open skies" deal between the US and Europe is set to drive consolidation in the airline industry, analysts say.

Investors were seemingly unimpressed by TPG's approach, with Iberia's shares falling 2.5% to 3.90 euros in Madrid.

TPG, formerly known as Texas Pacific Group, will have 30 days to look at the information provided by Iberia.

Analysts say that British Airways, which owns 10% of Iberia, may be forced into making a defensive bid, if a rival airline entered the fray for the Spanish carrier.