16th Jan 2008
Katie Cantle
China Eastern Airlines has begun to soften its stance on a possible investment by Air China and now says it plans to take seriously a cooperation with CA if Singapore Airlines, whose bid for a stake was rejected by minority shareholders last week, remains involved.
"We are talking with Singapore Airlines every day," China Eastern Board Secretary Luo Zhuping said yesterday, noting that CA's stated intention to purchase a no-more-than-30% stake in CEA for at least HK$5 ($0.64) per share has raised minority shareholders' expectations that SIA will come back with a higher bid than the HK$3.80 per share offered originally (ATWOnline, Jan. 10).
"But if Singapore Airlines raises its price now, CA will possibly offer a higher price. So we have to wait until CA proposes its offer formally, and then we will make a serious consideration of it after proper discussions with SIA," Luo elaborated. SIA has said it will continue to pursue a stake purchase but has insisted that its offer represented "full and fair value."
CA parent China National Aviation Holding Co. said yesterday it is confident that its bid will be approved by the parties concerned but that its ultimate success "depends on whether a possible price war [with SIA] will happen."
According to the November agreement between CEA and SIA, the carriers are not allowed to sign stake purchase agreements with other investors until Aug. 9. China Securities Co. aviation analyst Li Lei noted that "won't impede CA from proposing its offer, as there is little possibility that CEA's deal with SIA can be successfully passed by CEA's minority shareholders within this timeframe."
http://atwonline.com/news/story.html?storyID=11415
