CX challenging SQ in MU stakes

[sqforever]

Cathay wants to invest a large chunk of money in to china eastern. SQ just purchased 1/4 as we all know.

Link: http://www.telegraph.co.uk/money/mai...ncathay121.xml

read for yourself! There is definitely going to be some tussling in Singapore over this!

[Megatop]

As part of the proposed deal between China Eastern and the Singaporean investors, the Chinese airline was expected to agree not to sell shares to a competitor of Singapore Airlines.


Interesting...

[singaporu_kooku]

The news didn't mention that Cathay is going to invest $4billion. MU is valued at $4billion and SQ deals is yet to be formalised.

I wonder, how much stake Cathay wants to get and how much money they prepared to invest. Hmmm... Very interesting indeed.

[sqforever]

Thanks kooku. Read the article wrong, thought it meant that CX was wanting to invest 4 bn, not MU being worth 4 bn.

[TurnLeft ThankYou!]

Ploy play?

This may just be a ploy by Cathay to push up SQ's price or what they are prepared to pay.

By showing a feined interest, Cathay could make the deal more expensive for SQ who really want to do this deal.

Its highly unlikely that ChinaEastern would deal with both. Neither party would go through with it as they SQ/Cathay are regional compeditors. It will just make the one who is the keenest, win by outbidding what they belive the other is prepared to pay.

Airlines have a strong history of doing this to each other all the time. Its designed to stop someone getting a to good of deal to cheap.
Its all corporate games!

[jjpb3]

Looks like CX just pulled out:

Hong Kong carrier Cathay Pacific said it would not be proceeding with the deal to buy shares in China Eastern Airlines.

The Hong Kong carrier had planned to team up with China National Aviation Holding Co to buy a slice of Shanghai-based China Eastern.

Cathay Pacific did not say why it was pulling out.

http://www.channelnewsasia.com/stori...301775/1/.html

I do wonder about the politics behind all this.

[Singapore_Air]

Cathay's statement, which declined to give further details of the reasons for its about-turn, is an embarrassment to the airline, which has a long history in China.

http://www.telegraph.co.uk/money/mai...ncathay124.xml

I find the whole saga rather bizarre considering it only lasted a few days?

Anyway, business and life move on...

[jjpb3]

http://www.telegraph.co.uk/money/mai...ncathay124.xml

I find the whole saga rather bizarre considering it only lasted a few days?

Anyway, business and life move on...

Bizarre when viewed through the lens of (relatively) free-market capitalism, I agree.

What an interesting development nonetheless.

[flyguy]

its too early to say for sure yet - as Cathay can come up with another such stunt again. But anyway CX already have shares in Air China which in turn have shares in MU - and besides CX HQ is just next door to greater China - and it can launched more air services from Hk to China airports like SHA n PEK and onwards to US or Europe - whereas its not possible for SQ to do so without a stake in a Chinese airline.