Forum Archive Index - March 2000

["Oliver Shapleski" <oliver.shapleski@vuw.ac.nz>]

I'm certainly following Richard's thoughts on any potential sale.  I would
have thought the sale of our national carrier will simply create too many
problems with existing relationships, even before the buyer and seller start
trying to deal with the Commerce Commission (which will surely mount some
seriously high hurdles?) .  I'm surprised Qantas are spending money looking
at AIRVB - not only will they have to contend with the CC (which may have
more teeth by the time BRY get serious about selling), but they've got their
own Trade Practices Act to get past as well!  Haven't heard too much
negative press on AIR from everyone on Sharechat lately, but imho it ain't
gonna be the BRY saviour, and I can't see any buyer paying much in the way
of a premium (if a deal ever actually gets sanctioned).  Why don't people
think the CC will be much of a problem?

(Don't hold AIRVA/B)



----- Original Message -----
From: Richard Yelash <richard.yelash@telecom.co.nz>
To: <sharechat@sharechat.co.nz>
Sent: Tuesday, March 28, 2000 4:36 PM
Subject: Re: [sharechat] AIRVB trading today


> One question is how does this affect the oneworld and star alliances.
>
> Surely a company ( Qantas) can't be in the oneworld alliance and yet own a
large chunk of another airline in a competitors alliance or will they both
look to move out of the alliances, or move airnz into the oneworld alliance?
>
> Any thoughts?
>
> >>> smndallimore@hotmail.com 28-03-2000 16:03 >>>
> It appears as if the more cautious investors decided to wait until the air
> clears over the Air NZ sale before making their move while speculators and
> short-term traders decided to bail out in a hurry today - which is why we
> have seen the price drop to $2.30.
>
> I have seen this happen in the past couple of weeks and the price has
> quickly moved back to the $2.40 resistance level so those of you who are
> sitting on AIRVB shares, do not worry. A sale of a stake in AirNZ is
> inevitable and it is only a matter of when and to whom.
>
> The heavy trading in Brierley shares which continued today from last week
> indicate that Singaporean interests are increasing their control of BRY
> which suggests that SIA are still very much the "favourite" in this race.
> Many aviation commentators and analysts also believe that the Qantas bid
> will not be successful because of regulatory monopoly constraints from
both
> the Australian and NZ Commerce Commissions.
>
> Attached below is an article from the Singapore Business Times which may
be
> of interest to readers.
>
> ---------------------------------------------------------------
> Talks with SIA spark suitors' pursuit of AirNZ
> Even Qantas comes a-wooing but Brierley is in no hurry to sell its stake
>
> [By Conrad Raj in Singapore and Surinder Singh in Sydney ]
>
> THANKS to its talks with Singapore Airlines, Air New Zealand has now
> attracted a number of suitors, including Australia's Qantas Airways.
>
> However, Air New Zealand's current controlling shareholder, Brierley
> Investments, is in no hurry now to sell as it wants to first close its
> purchase of domestic Australian carrier Ansett Airlines from News Ltd.
>
> "The news of the discussions with SIA flushed out several buyers,
including
> Qantas. But unfortunately the attempts of these various people to get hold
> of the 'B' shares (open to foreigners) has complicated regulatory
approvals
> for the acquisition of Ansett," Brierley's CEO Gregg Terry told BT
> yesterday.
>
> However, he declined to name the other suitors at this stage.
>
> Air New Zealand, which already owns 50 per cent of Ansett, has decided to
> exercise its pre-emptive rights to buy the other half from Rupert
Murdoch's
> News Ltd after the latter struck a deal with SIA to sell it for A$500
> million.
>
> Then Brierley decided that it needed a strategic partner to take Air New
> Zealand forward and offered to sell the 16.7 per cent of the "B" shares
that
> it owns in the Kiwi carrier to SIA.
>
> Talks with Brierley stalled after SIA said any deal with Air New Zealand
> would be contingent on it getting an eventual 40 per cent stake in Air New
> Zealand.
>
> The Singapore carrier, having been thwarted in its earlier attempt to
> penetrate the lucrative Australian domestic market through Ansett, decided
> to enter the market through a tie-up with Richard Branson's proposed
> Australian venture, Virgin Australia. SIA is in the process of completing
> its 49 per cent purchase of Mr Branson's flagship Virgin Atlantic for
which
> it is paying £680 million (S$1.9 billion).
>
> However, Brierley is not shutting its doors completely. Mr Terry
explained:
> "So we have decided to simply focus on closing the Ansett (deal). After
the
> end of April we will reconsider our strategy regarding Air New Zealand."
>
> Meanwhile, Qantas chief executive James Strong told the Australian Stock
> Exchange in a statement yesterday that the company was interested in Air
New
> Zealand as a partnership between them "would create a major airline group
in
> this region of the world with the size and capital base to compete
> aggressively in a rapidly changing international market".
>
> Dr Cheong Choong Kong, SIA's deputy chairman and chief executive officer,
> who was in Sydney yesterday to launch the airline's increase in its daily
> flights from Singapore to the Australian city from two to three, declined
to
> comment on the Qantas statement.
>
> "I am not going to talk about it. I know what you are going to ask," Dr
> Cheong said at a media briefing.
>
> Analysts said Qantas' move was an attempt to block a heavyweight alliance
> between SIA and Air New Zealand which could erode its current dominance in
> the Australian domestic market.
>
> Qantas spokesman Bernard Shirley yesterday told BT in Sydney that the
> airline was not prepared to make any statement at this time apart from
what
> was in the statement to the ASX.
>
> Any transaction between Qantas and Brierley will be subject to a
> satisfactory resolution of a significant number of issues. These would
> include the sale by Air NZ of Ansett, New Zealand and Australian
government
> approvals, New Zealand and Australian competition authority approvals and
> support from the board and shareholders of Air NZ.
>
> A Reuters report on the Qantas move quoted Merrill Lynch analyst Simon
> Gresham as saying that a Qantas connection would make AirNZ, which he
valued
> at about NZ$3.50 apiece, more appealing. The B-class stock available to
> foreigners ended at NZ$2.39 yesterday.
>
> The report also quoted Macquarie Equities analyst Ian Myles as saying:
"This
> is a very interesting move by Qantas but I still believe that it's more
> likely that someone in the Star Alliance (like Singapore) will own AirNZ."
>
> Morgan Stanley Dean Witter analyst Chin Lim said: "I think it will be very
> difficult for Qantas to get a position."
>
> Besides the Air New Zealand "B" shares, Brierley also holds just over 30
per
> cent of the "A" shares which only New Zealanders can own.
>
>
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