SIA says stake offer for China Eastern still valid
29 February 2008
Singapore: Singapore International Airlines (SIA) says its $0.487 per share offer to buy a stake in China Eastern Airlines remains valid with the Chinese carrier asserting that it would not consider a rival bid by China National Aviation Holding (CNAHC).
According to Singapore Airlines spokesman, Stephen Forshaw, the airline's proposal for re-capitalisation of China Eastern Airlines is still on the table and remains the same as the one announced in September 2007 and put to shareholder vote in January 2008.
Shanghai-based China Eastern has repeatedly asserted that it won't consider a bid put forward by China National Aviation Holding, the parent company of rival Air China. The assertion remains in place despite a shareholder vote against a link-up with SIA.
China Eastern says that CNAHC's proposal fails to demonstrate sincere intentions and thorough planning apart from raising issues such as uncertainty about Chinese government support for such a partnership. There were also doubts about anti-trust issues cropping up in any link-up with CNAHC.
Beijing-based Air China successfully blocked a deal last month, which if successful would have allowed Singapore Airlines and its parent Temasek Holdings to pick up a 24 per cent stake in China Eastern. The airline put forth its own offer of at least $0.641 per China Eastern share.
According to Forshaw, Singapore Airlines looks forward to continuing discussions with China Eastern about taking the proposal forward.
China Eastern said Singapore Airlines remains its preferred company to partner with, citing Singapore Airlines' profitability, reputation for customer service and route and cost synergies the two airlines would share.