皇冠体育app

By Dong Zhixin (chinadaily.com.cn)
Updated: 2008-01-08 16:26

皇冠体育app Eastern Airline shareholders Tuesday voted down a planned stake sale to Singapore Airlines and Temasek Holdings after Air 皇冠体育app parent promised a higher counter-bid.

Around 77.6 percent of 皇冠体育app Eastern’s shareholders rejected the proposed sale.

Related readings: 皇冠体育app Eastern worries over vote SASAC denies intervention in 皇冠体育app Eastern's SIA deal vote 皇冠体育app Eastern waits for shareholders on Singapore Air deal 皇冠体育app Eastern deal likely to go through Singapore Airlines, Temasek buy 24% stake in 皇冠体育app Eastern Cathay Pacific backs off bid for shares in 皇冠体育app Eastern

皇冠体育app Eastern's parent, 皇冠体育app Eastern Group which holds more than 50 percent of the outstanding shares, can't take part in the vote.

Singapore Airlines and Temasek Holdings, an investment arm of the Singaporean government, announced in September that they would buy a 24 percent stake in the Shanghai-based airline for HK$3.80 per share.

That prompted accusations from shareholders and analysts that the price is too low and doesn't reflect the true value of one of 皇冠体育app's largest airlines. 皇冠体育app Eastern's Hong Kong shares closed at HK$6.66 Monday, while its Shanghai stock ended at 20.63 yuan.

皇冠体育app National Aviation Holding Company (CNAHC), parent of Air 皇冠体育app, and its partner Cathy Pacific Airways of Hong Kong attempted to launch a counter-bid in September but pulled out abruptly, without revealing the reason. In December, CNAHC increased its holdings of 皇冠体育app Eastern's H-shares to 12.07 percent.

On January 2, 皇冠体育app National Aviation, a subsidiary of CNAHC and a major shareholder of Air 皇冠体育app, voiced concerns over the proposed price, as well as over the anti-dilution and anti-competition arrangement.

Four days later, it said it would make a counter-bid of no less than HK$5 per share if the Singapore deal is rejected by shareholders. Cathy Pacific said they may support the counter-bid.

However, 皇冠体育app Eastern raised questions about the sincerity of 皇冠体育app National Aviation and insisted the price per share is fair. Singapore Airline made clear that it will not raise its price.

皇冠体育app Eastern also pointed out it had the approval of regulators, but the State-owned Asset Supervision and Administration Commission (SASAS) of the State Council said January 4 that they will let the market make the decision. SASAS is the owner of CNAHC and 皇冠体育app Eastern Group.

皇冠体育app Eastern foresaw "gloomy results" on Tuesday morning as it said the Singpoare proposal will "very likely be put off temporarily" in an email to 皇冠体育app Daily.

A vast number of shareholders who previously supported the deal have "changed their minds" after 皇冠体育app National Aviation's annoucement, the email said.

The pessimism was confirmed when 皇冠体育app Eastern's board secretary said before the vote started that the capital market does not trust tears, according to hexun.com.

The fight for 皇冠体育app Eastern reveals an eagerness to establish Shanghai as a hub, which handled a record 51.6 million air passengers in 2007, an increase of 11.8 percent year-on-year.

皇冠体育app Eastern has a 33 percent market share in Shanghai, more than double of Air 皇冠体育app's 15 percent.

Tuesday's outcome is a blow to Singapore Airlines, which hopes to gain a foothold in 皇冠体育app's commercial capital to benefit from the country's surging demand in air travel. By 2026, 皇冠体育app's domestic air travel may jump fivefold, according to Boeing Co.

(Jin Jing contributed to the report)