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A380 A Great Way to Fly

EastonBay
Master

08-Jan-2008 18:02

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I have faith in SIA.

Let's just see if Air China really will offer HKD 5 and how long will it take for the offer to arrive. It was an intention only to fan off SIA, not a firm offer.

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huatah
Veteran

08-Jan-2008 17:26

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tks idesa.. indeed.. me too a gambler.. basin on the sentiments of shareholder.. i guess most wanted better value.. then being undercut..

Good luck to u.. cheers..

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Arbitrager
Senior

08-Jan-2008 17:24

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Chinese are damn sore businessman man... agreement made previous at HKD3.8 per share when share trading only at HKD5+.. now price appreciated to HKD10+ expect ppl to pay higer.. bullshit..

they r taking singapore GIC as cash cow to slaughter man.. lucky SIA din up their offer if not, share price shd drop.

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Arbitrager
Senior

08-Jan-2008 17:20

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Singapore Air Fails in Bid to Buy Stake in China Eastern Air

By Irene Shen

Singapore Air Fails in Bid to Buy Stake in China Eastern Air

c.2008 Bloomberg News

By Irene Shen

Jan. 8 (Bloomberg) -- Singapore Airlines Ltd. failed to win approval to buy a stake in China Eastern Airlines Corp., clearing the way for Air China Ltd.'s parent to make a higher offer and become the nation's dominant carrier.

Minority shareholders of Shanghai-based China Eastern voted today against selling a 24 percent stake in the nation's third- largest carrier to Singapore Air and its parent Temasek Holdings Pte. for HK$7.16 billion ($918 million).

The decision is a victory for Air China and Hong Kong-based affiliate Cathay Pacific Airways Ltd. as they seek to block their rival's access to the world's second-largest aviation market. Air China's parent, holder of about 10 percent of China Eastern's minority shares, pledged to pay at least 32 percent more for the stake should the Singapore Air deal be rejected.

"The Air China offer is better and it has the advantage of being from a state-owned company," said Han Gang, who helps manage the equivalent of $8 billion at Great Wall Asset Management Co. in Shenzhen. "The government must have wanted to re-open the opportunity for consolidation among the country's carriers." Great Wall owns shares in both China Eastern and Air China, the nation's largest international carrier.

No New Offer

Singapore Air won't raise its offer, which followed at least a year of talks, as "nothing is a must-have," Chief Executive Officer Chew Choon Seng said on Dec. 12. Still, scrapping the bid will hamper its ability to challenge Air China and Cathay Pacific in China, where air travel may grow fivefold by 2026, according to Boeing Co.

"There may be other opportunities in the future but nothing has the same long-term appeal as China Eastern," said Derek Sadubin, chief operating officer of the Sydney-based Centre for Asia-Pacific Aviation, which advises airlines. "China Eastern has a strong existing market share in Shanghai, the economic powerhouse of China, and exceptional growth potential."

Air China's parent, China National Aviation Holding Co., said on Jan. 6 that it would offer to buy a 24 percent stake in China Eastern for at least HK$5 a share within two weeks of the Singapore deal being rejected.

Singapore Air and Temasek agreed to buy the stake, comprising new shares priced at HK$3.80 apiece, in September. China Eastern's parent was also due to buy HK$4.2 billion of new shares at the same price to maintain its majority.

-0- Jan/08/2008 07:51 GMT

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idesa168
Elite

08-Jan-2008 17:14

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The shareprice will drops when opens tomorrow. Huatah, congratulation, you made the right choice by exiting. I guess I am a gambler...lol...on the wrong side. Cheers! My target price opens tomorrow is 16.30, thereafter depends on the mkt sentiment before 11am when most shares will settle down. I am ready to scoop up this SIA even without the deal...look at the PE, it's below 10, a good bet!

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mike8057d
Veteran

08-Jan-2008 16:39

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Rejected....good news? The share price up

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myinvest
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08-Jan-2008 16:30

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Updated 4.15 pm

China Eastern shareholders reject SIA deal

SHANGHAI/HONG KONG - Holders of China Eastern Airlines' Shanghai- and Hong Kong-listed shares on Tuesday rejected a deal to sell a 24 per cent stake in the country's third-largest carrier to Singapore Airlines for US$920 million.

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mike8057d
Veteran

08-Jan-2008 16:25

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Medicorp Channel 5

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dinola
Member

08-Jan-2008 16:24

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Which source can we find out first hand whether Deal or No Deal?

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huatah
Veteran

08-Jan-2008 12:55

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Counter will reopen to trade tmr..

Good luck to those vested..

Cheers..

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huatah
Veteran

08-Jan-2008 12:54

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TH liao..

No more chance to go in or out now..

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huatah
Veteran

08-Jan-2008 12:04

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haha.. alamak.. me thanks u in advance long long ago... heehee..

Com'on.. both add up.. almost 110yrs old liao.. still petty abt such thing..

no need u shot down.. it come down by itself liao.. hehe.. mayb i can go in again later.. lol

Tks..

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Pension
Elite

08-Jan-2008 12:01

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if no thank u, i short it down again.

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Pension
Elite

08-Jan-2008 11:56

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huatah, u see, now up and where is ur thank you.

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EastonBay
Master

08-Jan-2008 11:47

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there is also a political angle to this tussle. The pro-competition camp (in favour of SIA's deal) vs protectionism camp behind the backdrop.

getting the nod from minority shareholder allows access for SIA to domestic China routes, i.e. future income, something which is not concrete for the moment. However, CEA is the only $$ losing airlines among the big 3 in China. In fact, earlier last year when the deal finally came into the open, many analysts actually thought this may not be a good deal for SIA, worrying that it may become a burden for SIA. My guess, that's why, SIA said the offer is it's max. and will not be increasing the bid.

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huatah
Veteran

08-Jan-2008 11:32

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tks shplayer and idesa.. indeed.. tat's wat i called de mixed feeling.. haha.. better to have $$ in my pocket first. ride on later if things r more clear.. though by then.. i might lose out in gaining more.. rather b safe than sorry..

Cheers

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idesa168
Elite

08-Jan-2008 11:29

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It's hard to predict which way the vote will go at this juncture. With CX to bid for the deal, somehow it's still a mainland airline, which I do not see a good deal in long term to go international. The worrisome factor is the bidding price which all the bidders offer a much higher price then SIA. I am just afraid that the minority will be myopia with the short term gain and forego the longterm benefits that SIA is to offer. Shplayer, thanks for the news article, I saw it. It's very risky now for me to go into SIA that if the deal did not go through, it's gonna drop, which I wun have any buffer...cheers, I am happy to stay at the sideline and see the deal unfold in a couple of hours.

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shplayer
Elite

08-Jan-2008 11:21

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BT 8 Jan 07

Cathay Pacific backs move to derail SIA's China bid

It will join proposed counter-bid; analysts suspect power struggle in Beijing

By VEN SREENIVASAN

(SINGAPORE) Cathay Pacific has joined hands with Air China's parent in what looks like a determined effort to keep Singapore Airlines from gaining a foothold in the mainland.

In the balance: A rejection of SIA's deal is more risky for China Eastern shareholders as Air China may not put an offer to them, says Merrill

The two partners will jointly make a counter-bid for a stake in China Eastern Airline (CEA) at HK$5 per share or better.

The announcement came on the eve of a crucial CEA shareholder vote today to ratify a joint 24 per cent stake-purchase in the Shanghai-based carrier by SIA and its controlling shareholder Temasek Holdings.

It appears, however, that investors are becoming increasingly pessimistic about the prospect of the SIA deal going through. Yesterday, SIA shares tumbled to a nine-month low in Singapore while Cathay Pacific stock rose in Hong Kong in the lead-up to the vote which observers see as a chaotic proxy war amongst Beijing's aviation regulators.

SIA stock fell 44 cents to $16.52 yesterday in Singapore. However, the shares of SIA's rival, and Air China's partner, Cathay Pacific rose to as high as HK$20.15 before closing with a net 2 HK cents gain at HK$20, bucking the broader Hong Kong market's slide yesterday.

Air China's parent, which holds a substantial minority stake in its rival CEA, has already made it clear that it will not only vote against the SIA offer, but also put in a counter-bid of HK$5 or better should the Singapore deal fall through.

Such an offer would still be at a discount to CEA's closing price of HK$6.66 (down 26 HK cents) yesterday in Hong Kong.

Nevertheless, Air China says it intends to up its stake in CEA to 30 per cent, from the current 12 per cent, thus making the latter a strategic partner in a troika which includes itself and Cathay Pacific.

The question is whether it can convince at least a couple of other institutional shareholders on the merits of ditching SIA for Air China. Analysts are not impressed by the merits of an Air China-Cathay-CEA merger or partnership. Neither are they taken up with the mixed signals in the lead up to today's vote.

In a report issued yesterday, Merrill Lynch noted that the outcome of today's vote could determine the evolution of China's airline sector for years to come and would impact other carriers around the region.

'Overshadowing the whole process is an apparent power struggle in Beijing between pro-competition officials and those seeking to consolidate the industry,' Merrill Lynch's Paul Drewberry and Ying Ying How noted in their Jan 7 report. 'The recent appointment of Air China's chairman as the new aviation minister implies those in favor of consolidation are gaining the upper hand - potentially throwing another roadblock at the SIA deal. Whatever the outcome, the country's aviation policy is now as confused and inconsistent as it has ever been.'

Merrill Lynch said CEA's price would continue to slide no matter what the outcome of the vote, but said SIA's selldown was overdone.

Meanwhile, SIA reiterated its position: that it will not be drawn into a bidding war for CEA and would rather walk away from the deal than up its HK$3.80 offer price.

The general consensus amongst observers is that a failure of the SIA-Temasek stake purchase will hurt loss-making CEA as it will not have a strong partner to help it turn around.

Moreover, as Merrill Lynch noted yesterday, 'rejection of the deal in hope of a higher offer is more risky' given that Air China may never even put such an offer to shareholders.

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huatah
Veteran

08-Jan-2008 11:13

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Tks bro idesa for your analysze.. a bit regret clearing off after reading your posting.. but then.. like u say.. always sweet to have $ in de pocket.. guess i made my decision cos I dun noe who is the major shareholder for this china eastern. If i noe.. at least can guess wat they looking for.. future or instance $$..

Tks again.. cheers..

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shplayer
Elite

08-Jan-2008 11:08

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idesa168,

It was reported in CNBC this morning that Cathay Pac said it may join in the fray with China Air in their counter offer.

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