Shareholders reject Singapore Airlines bid for stake in China Eastern
Jan. 8, 2008. Beijing - Shareholders in China's third-largest airline has rejected a bid by Singapore Airlines to buy a minority stake.
January 8, 2008 By THE CANADIAN PRESS
Jan. 8, 2008. Beijing – Shareholders in China's third-largest airline rejected
a bid by Singapore Airlines to buy a minority stake Tuesday after a
rival Chinese carrier offered more money in an unusual takeover
battle involving two state-owned companies.
China Eastern Airlines supported Singapore's bid, which would
bring the struggling carrier cash and foreign expertise. But
shareholders voted against it at a meeting in China Eastern's home
city of Shanghai, the airline announced.
The rejection was a blow to Singapore's efforts to gain a
foothold in China's booming air travel market. It came after Air
China, another state-owned carrier, made a last-minute public offer
to top the Singapore price.
China Eastern Chairman Li Fenghua, talking to reporters after the
vote, expressed “great regret'' at the outcome and did not
immediately say what the carrier would do next.
The Singapore offer prompted public maneuvering and wooing of
shareholders that is more common in Western economies but almost
unknown in China's secretive, government-dominated corporate world.
The battle came amid rapid change in China's airline industry,
which is expected to become the world's largest over the next two
Singapore Airlines and its parent, the government investment
agency Temasek Holdings Ltd., offered US$923.8 million for a 24 per
cent stake in China Eastern.
Air China issued a public statement over the weekend offering
investors at least 5 Hong Kong dollars per share if they rejected
the Singapore tie-up.
But China Eastern noted that it had yet to receive an official
"In a period of four months, CNAC (China National Aviation
Corp.) has never directly communicated with the Board and the
management of CEA (China Eastern Airlines) regarding cooperation,''
it said in a statement late Monday.