Air China wants Cathay Pacific Full stop!

[Triple 7]

$ale of the Century........ Air China plans raid on Cathay

AIR China is reported to be negotiating a takeover of Hong Kong's Cathay Pacific Airways.

Under the deal, Cathay Pacific would first buy out its local rival, Hong Kong Dragon Airlines Ltd, before being subsumed into the Air China group, reports said.

Swire has a 45 per cent stake in Cathay Pacific and a 10 per cent stake in Air China.

Carolyn Leung, a Cathay Pacific spokeswoman, declined to discuss the report.

"We don't comment on market rumours," she said.

The report said if Hong Kong-listed Swire accepts Air China shares in return for its stake in Cathay, it would be the single largest shareholder in the mainland carrier.

This would place Swire's mainly British executives at the core of the Chinese airline's operations.

The report also cited unidentified "informed sources in the affected companies" as saying a deal would likely be announced in two weeks' time.

Any deal will require consent from multiple shareholders at the listed firms that potentially have divergent interests. Dragonair is controlled by China National Aviation Co, while Chinese conglomerate CITIC Pacific Ltd has stakes in both airlines but a deal would be a boon for Cathay, which only won the right to fly to China a couple of years ago after an absence of more than 10 years.

Cathay resumed passenger services to Beijing in December 2003 after a 13-year hiatus in the mainland, and it now operates daily services to the capital.

The airline early this year launched passenger services to Xiamen and a freighter service to Shanghai.

[sling load]

I cant see Sir Adrian Swire giving up Cathay so easily. Great rumour though!!!

[404 Titan]

Triple 7

This has already been done to death in the Fragrant Harbour forum. CX, Swire and Air China have come out and flatly rebuffed this rumour yesterday.

Message to staff from the Chairman

Dear all,

We have noted press and other reports about possible changes in the ownership of Cathay Pacific, Air China and Dragonair. We would like to reiterate that Swire Pacific remains committed to being the principal shareholder in Cathay Pacific for the long term.

For more information, please refer to the company's statement to the Stock Exchange of Hong Kong.

David Turnbull
Chairman


Joint clarificatory announcement to the Hong Kong Stock Exchange

This clarificatory announcement is made at the request of the Hong Kong Stock Exchange. Swire Pacific and Cathay Pacific have noted press and other reports about possible changes in the ownership of Cathay Pacific, Air China and Dragonair. Cathay Pacific and Air China have made progress in exploring opportunities for further cooperation, including in relation to the Hong Kong-China aviation market, under the terms of the MOU dated 20 October, 2004. Such cooperation discussions necessarily involve Dragonair. However, there are currently no agreements between Air China and Cathay Pacific in relation to Dragonair. Swire Pacific remains committed to being the principal shareholder in Cathay Pacific for the long term and does not intend to do anything which would require a general offer to be made for the shares of Cathay Pacific under the Hong Kong Code on Takeovers and Mergers. In addition, Swire Pacific does not intend to become the principal shareholder of Air China. The board of Cathay Pacific has not received an approach from any person which might lead to a general offer being made for its shares.


This clarificatory announcement is made at the request of the Hong Kong Stock Exchange.

Swire Pacific and Cathay Pacific have noted press and other reports about possible changes in the ownership of Cathay Pacific, Air China and Dragonair.

On 20 October, 2004, Cathay Pacific and Air China announced that they had entered into the MOU, which envisaged a strategic investment by Cathay Pacific in Air China and future cooperation between them. In December, 2004, Cathay Pacific acquired a 10% interest in the share capital of Air China when Air China’s shares were listed on the Hong Kong Stock Exchange. This acquisition was the subject of announcements by Cathay Pacific dated 21 November, 2004 and 15 December, 2004 and a circular to its shareholders dated 30 December, 2004.

The MOU set out the framework for discussing, among other things, the objective of exploring the opportunities for developing a close partnership and cooperation between the aviation and related businesses of Cathay Pacific and Air China in Hong Kong and Mainland China. Cathay Pacific and Air China have made progress in exploring opportunities for further cooperation, including in relation to the Hong Kong-China aviation market, under the terms of the MOU. Such cooperation discussions necessarily involve Dragonair. However, there are currently no agreements between Air China and Cathay Pacific in relation to Dragonair.

Swire Pacific, which holds 46.5% of the shares in Cathay Pacific, is committed to being the principal shareholder of Cathay Pacific for the long term and does not intend to do anything which would require a general offer to be made for the shares of Cathay Pacific under the Hong Kong Code on Takeovers and Mergers. In addition, Swire Pacific does not intend to become the principal shareholder of Air China. The board of Cathay Pacific has not received an approach from any person which might lead to a general offer being made for its shares.

By order of the Boards of Swire Pacific and Cathay Pacific

[Eastwest Loco]

petitfromage - I think you are dealing from a full deck, unfortunately.

It will be horrorsville if CA get hold of CX unless CX maintain the representation and ticketing facilities within Australia.

CA and all other chinese based carries are an absolute atrocity to deal with. CX is on occasions (today was one) are very bad to deal with if it is in the least bit complicated and requires ticket issue offshore.

In the case of mainland China based airlines, we just do NOT bother as there is no way known to man that it is going to work anyway.

hopefully the Swire Group will retain control.

We can but hope.

Best all

EWL

[404 Titan]

Eastwest Loco

This rumour has been going on in Hong Kong in one form or another for the last couple of months. I would be very surprised if Sir Adrian Swire would relinquish his control of CX if he could possibly avoid it. It is a tremendous cash cow for the Swire group and has been an integral part of the company since 1948. What all this is about is that Cathay and Swire want to regain control of KA (Dragonair) that they lost in 1997 when the Chinese took control of Hong Kong. My guess is that by the end of the month CX will be given the OK to take control of KA and Swire will still be in control of CX. There may be some other trade offs though to keep the mainlanders in Beijing happy but Swire and CX will get what they want. All we are seeing here is the manoeuvring of the parties before a deal is made. Frankly the South China Morning Post that reported this yesterday has egg on its face today because Air China, CX and Swire have all squashed the report as rubbish.

South China Morning Post article, March 17.

Thursday, March 17, 2005

AVIATION
Air China rules out Cathay Pacific takeover


AGENCE FRANCE-PRESSE in Beijing

Next Story
Updated at 12.52pm:

National carrier Air China on Thursday said it had no intention of acquiring a controlling stake in Hong Kong’s leading airline Cathay Pacific, dismissing reports of a merger.
“There is currently no agreement or arrangement between Air China, CNAC and Cathay Pacific which is discloseable under the Listing Rules,” Air China said in a statement to the Hong Kong Stock Exchange, where it is listed.


“In particular, Air China has no intention to acquire a controlling equity interest in Cathay Pacific.”

Air China also said that its corporate parent, China National Aviation Holding (CNAC), intends to remain its controlling shareholder.

The statement followed a report that Air China would take over Cathay Pacific while the Hong Kong airline’s British parent Swire Pacific would then take a large stake in the enlarged mainland carrier.

The report said the tie-up would see Hong Kong’s second airline, Dragonair, taken over first by Cathay Pacific and in turn folded into the new company.

In a joint statement late on Wednesday, Cathay Pacific and Swire also denied the report.

Cathay Pacific shares jumped nearly 5.0 per cent to $HK15.00 on the report on Wednesday while Air China was up 3.5 per cent at $HK2.925 as analysts said such a tie-up could make the new combined entity a powerful player in the industry.

The mainland is one of the world’s fastest growing aviation markets and any such merger would be an industry turning point with implications for airlines worldwide, the Sydney-based Centre for Asia Pacific Aviation (Capa) said.

“A combination of Air China, Cathay and Dragonair would have sufficient impact to tilt not only the regional aviation balance, but also the global airline industry,” it said in a statement.

[SMOC]

Cathay Pacific in talks with Air_China

Friday, March 18, 2005 at 03:11 JST
HONG KONG — Hong Kong's flagship airline Cathay Pacific has confirmed it is in talks with Air China over a range of strategic investments, which may include a possible takeover of its smaller rival Dragonair.


A statement issued Wednesday said Cathay Pacific and Air China entered into a memorandum of understanding last October, which envisaged a strategic investment by Cathay Pacific in Air China and future cooperation between them. (Kyodo News)

http://www.japantoday.com/e/?content=news&cat=7&id=331138