Forum Archive Index - March 2000

["Ben Dutton" <bendutton@sharechat.co.nz>]

Guys -

Read down the page...the NZ Herald article is the seventh article in the NZ
Market News section.

I put them both in to get the two different perspective's...

Thanks

Benjamin Dutton

----- Original Message -----
From: simon dallimore <smndallimore@hotmail.com>
To: <sharechat@sharechat.co.nz>
Sent: Thursday, March 16, 2000 8:22 PM
Subject: [sharechat] Air NZ deal is still on cards - Read NZ Herald and not
SMH


> Hey Ben,
> The article you have on the front page of Sharechat this morning is from
the
> Sydney Morning Herald and is perhaps not as up to date as the article in
> this morning's NZ Herald. Perhaps, to give a balanced perspective of the
Air
> NZ situation for investors, it might pay to run the NZ Herald story too as
> the writer,Geoff Senescall has been very close to the action. Thanks.
> [For the benefit of readers, the article in the NZ Herald is reproduced
> below and my understanding from reading it is that the Singapore
> Airlines/Air NZ deal is not in disarray at all and looks very much on the
> cards pending Brierley buying up some more unrestricted shares to make up
> the quota required by Singapore Airlines.]
> Simon.
>
> Brierley clears path for Singapore offer
>
> 16.03.2000 - By GEOFF SENESCALL
>
> Brierley Investments was positioning itself yesterday to increase its
> shareholding in Air New Zealand so it could deliver a 25 per cent holding
to
> Singapore Airlines.
> Under the deal, which was hanging in the balance last night, Brierley
needs
> to buy a further 46 million of the unrestricted shares in Air New Zealand
to
> meet its side of the bargain.
> At present it holds around 96 million B shares, which equates to 17 per
cent
> of the total shares on issue in the local carrier. In a telling move,
> Brierley extended to October 1 the formal notice to Air New Zealand
> shareholders, needed to raise its stake in the airline to
> 60 per cent from 47 per cent.
> Brierley first issued the notice in June 1999 when it initially tried to
woo
> Singapore Airlines into buying shares in the local carrier without
success.
> In the latest notice Brierley has also amended the price it intends paying
> for each share to a range between 250c and 300c. Previously the company
had
> said it would pay between 240c and 340c for A shares and
> between 330c and 430c for B shares.
> The lower price reflects the recent weakness in the Air New Zealand share
> price as the company looks to digest its $A580 million purchase of the
> remaining 50 per cent of Ansett Australia it agreed to buy last month.
> It also straddles the 280c price Brierley is understood to have agreed to
> sell shares to Singapore.
> On speculation of a deal with Singapore, the Air New Zealand B shares
closed
> at 249c after trading as high as 262c yesterday. The A shares closed at
> 202c.
> To buy the extra shares Brierley needs it can either stand in the market
or
> try to target local institutions owning B shares and attempt to swap them
> for Brierley A shares, which can be owned only by New Zealanders.
> There was speculation that Brierley might have already sounded out
> institutions about the share swap option. But this could not be confirmed
> last night by the Business Herald.
> Brokers were sceptical about Brierley's ability to source Air New Zealand
B
> shares through a stand in the market without pushing the price through the
> roof. According to Jason Smith - an Australian-based aviation analyst for
> Salomon Smith Barney - the proposed deal made sense for both Air New
Zealand
> and Ansett Australia as well as Singapore.
> "It makes logical sense, it raises the barriers to entry for new airlines
> into the Australia marketplace and it does form what should be a stronger
> competitor, on a three-year view, to Qantas," he said.
> "But I would still want to emphasise there is still a lot of work that
needs
> to be done in the integration of Air New Zealand and Ansett, regardless of
> Singapore coming in. It is probably going to expedite the integration
> process but there is still a couple of years of solid work that needs to
be
> done before the thing starts earning what it
> should be."
> Mr Smith said it made sense that Air New Zealand had a large shareholder
> which knew how to run an airline and was committed to the industry as
> opposed to one which was an asset manager, such as Brierley.
> "But realistically Singapore is not going to be sticking in extra capital
> and how can they under the A and B share structure?
> "But Singapore does give them extra access to systems, operations, people
> and certainly there is some surplus capacity that is expected to come out
of
> the Singapore fleet at the end of the year which the
> domestic and international businesses of Ansett would easily be able to
> use."
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