Singapore Airlines (SIA) said it is disappointed with the decision by shareholders on Tuesday to reject its bid to buy a minority stake after a rival Chinese carrier offered more money in an unusual public takeover battle involving two state-owned companies.

But SIA, in a statement shortly after the shareholders voted against the proposed transaction, said: 'We thank the shareholders who voted in favour of the transaction, and we respect the outcome of today's meeting.

'The transaction represents what all parties believe is, and remains, full and fair value for the equity injection to recapitalise the airline. The transaction has also been approved in accordance with relevant laws and regulations.

'The proposal is for a long-term strategic relationship with a willing partner. With Board and management involvement by Singapore Airlines, the proposal brings international expertise to China Eastern, which will help the airline meet the future challenges it will face in a competitive aviation environment in China.'

SIA said it will continue to support the building of a relationship with China Eastern, noting that the airlines are still mutually willing to develop the relationship. China Eastern Airlines supported the Singapore bid, which would have brought the struggling carrier cash and foreign expertise.

But nearly 78 per cent of shareholders who voted at a meeting in China Eastern's home city of Shanghai on Tuesday rejected the deal.

The rejection was a blow to SIA's efforts to gain a foothold in China's booming air travel market, which is expected to become the world's largest in the next two decades.