[photopress:airlines_China_Eastern.jpg,full,alignright]The Singapore Airlines bid to buy a 24% stake in China Eastern Airlines is turning out to be as good as an episode of Law and Order.
China National Aviation Holding, the parent company of flag carrier Air China, has said in a statement the US$923.8 million offer by Singapore Airlines and its parent, the government investment arm Temasek Holdings, did not ‘reflect the fair value of China Eastern.’ That is about $3.80 a share.
China Eastern, China’s third-biggest carrier, is listed in Hongkong and it is trading at about 3% more than the Singapore offer which seems pretty close.
Singapore Airlines said the offer was ‘fair and mutually agreed by all parties.’
Speaking for SIA Stephen Forshaw said, ‘It is the maximum justified on the business fundamentals.’ Which makes sense although you have to think of the sentence for a bit if you are not a financial trader.
Take it that China National Aviation Holding, which holds a 12.07% stake in China Eastern will vote against the deal on January 8.
Air China, together with Cathay Pacific Airways, made a higher bid in September last year but the government told it to takes its marbles and play elsewhere. ir China said at the time it would not bid for China Eastern shares for three months.
Neat.
Three months have passed and it is at least theoretically possible it is back in the hunt.
Morgan Stanley noted that any offer by China National Aviation Holding would still need to first gain approval from China’s regulator, which had already approved the Singapore Airlines joint bid.
China National Aviation said it reserves the right to make further proposals for China Eastern ‘which are more in the interests of all shareholders.’
So Air China might make another bid with Cathay Pacific and the future head of the goverment body in China is the current head of Air China
Airlines live in interesting times.
Source: International Herald Tribune
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