China Eastern Airlines Corp yesterday called on its shareholders
to make independent judgments on the deal with Singapore Airlines
amid concerns that rival Air China doesn't hold an objective
attitude toward the deal.
Guo Jianming, an official for China National Aviation Holding
Co, was quoted by Bloomberg News as saying yesterday that the group
will vote against the HK$7.2 billion (US$916 million) deal and
believe other minority shareholders will also vote against the
deal.
However, the group's publicity head Chu Chengping told Shanghai
Daily that the group followed its clarification statement published
last month and hasn't revealed its decision on the deal.
China National, owner of 3.8 percent of China Eastern, also has
a controlling stake in Air China Ltd.
China National said on Tuesday that the proposal price of the
deal "does not reflect the fair value of China Eastern Airlines"
and asked both companies to renew talks.
China Eastern thought the other way.
"The carrier is the H-share holder as well as a major rival of
China Eastern, so we are concerned that its doubts on the Singapore
deal lack independence and objectiveness and can't represent
minority shareholders," the Shanghai-based airline said yesterday
in an emailed statement, which appeared to be before China National
Aviation's latest comment.
"We hope investors of China Eastern can eye long-term interests
and help build the carrier into a top one," the statement said.
China Eastern has not received any alternative proposal from
other carriers, the country's third-largest carrier said.
"The proposed price of HK$3.80 per share resulted from a
long-term negotiation between China Eastern and Singapore Airlines,
which is six times of the book value at the end of 2006, much
higher than other deals of its kind," the company said.
Singapore Airlines and its parent Temasek Holdings Pte are
seeking to buy 24 percent of China Eastern to expand into China's
growing aviation market. Under the deal, China Eastern's parent
company would also invest HK$4.2 billion to maintain its
majority.
However, the deal needs approval from two-thirds of China
Eastern's minority owners, including Air China's parent, when they
meet on Tuesday to vote on the plan.
(Shanghai Daily January 4, 2008)