Technicality could thwart bid for China Eastern
14 January 2008
China Eastern Airlines (CEA) said it can't consider a bid from Air China's parent group due to a lockup clause that will run for the next eight months, the Wall Street Journal reported. China National Aviation Holding Co (CNAHC) announced on Friday that its plan to buy up to 30% of China Eastern included a "wide-ranging proposal" to link up Air China and its Shanghai-based rival. However, under the terms of the failed attempt by Singapore Airlines (SIA) and Temasek to buy 24% of China Eastern, the airline is barred from accepting offers from rival carriers until August 9. SIA confirmed that a lockup clause did exist and that it hadn't required shareholder approval. CNAHC is willing to pay at least HK$5 (US$0.64) per share, a 32% premium over the SIA-Temasek bid of HK$3.80 per share. China Eastern, however, is against the deal and still hopes to reach an agreement with the Singapore companies.
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