By Graeme Kennedy
Friday 17th March 2000 |
Text too small? |
![]() |
The strategic purchase, which sources said could still be salvaged if negotiations between Sir Selwyn and SIA chief executive Cheong Choong Kong resumed in Wellington yesterday, is understood to have been close to settlement on Wednesday at between $2.75 and $2.80 for BIL's parcel of Air New Zealand B shares.
Sir Selwyn was understood to have gone for the higher price after an agreement had been reached in principle. Reports of an impending sale this week drove the price of B shares - those able to be owned by foreigners - from around $2 to $2.49 as the restricted As climbed more than 10% to $2.02.
Sources said the deal could be resurrected but pointed out that relations between the two parties had already been strained by Air New Zealand last year exercising its pre-emptive rights to block SIA buying News Ltd's 50% of Ansett Australia - which Air New Zealand has secured.
SIA is understood to have planned, after gaining 17% of Air New Zealand through BIL's B shares, to raise its stake to the maximum allowable 25%, either through a $250 million to $290 million rights issue or by BIL securing more shares from the market. The total deal would be worth around $400 million.
An SIA equity link became more urgent for Air New Zealand as the Singapore carrier approached the deadline for a decision on whether to invest in Sir Richard Branson's planned budget operation with his Virgin airline in Australia, a move which would compete with Air New Zealand's recent 100% acquisition of Ansett Australia.
SIA last year paid more than $1.5 billion for 49% of Virgin Atlantic but a stake in Air New Zealand would make the carrier less inclined to jeopardise its indirect interest in Ansett Australia.
In Sydney, Salomon Smith Barney transport analyst Jason Smith said SIA would be "less likely" to become involved with Virgin Australia if it completed the Air New Zealand deal.
"And that would effectively reinforce the Qantas-Ansett duopoly in the Australian domestic market while raising the barrier to new entrants," he said.
Qantas shares, which dropped more than $1 billion in market value following the announcement Virgin would enter the Australian market, rose 35c to $3.90 with speculation of an Air New Zealand-SIA deal.
No comments yet
Second St John withdrawal of labour takes effect tomorrow with further strikes likely
Sanford Appoints Independent Director
CRP ADVISES CLOSURE OF SHARE OFFER TO EXISTING INVESTOR
Devon Funds Morning Note - 14 August 2024
OCR 5.25% - Monetary restraint tempered as inflation converges on target
Consumers still need due diligence as new deposit takers emerge.
Woolworths strike: staff asked to dress up in Disney costumes for a week on their own dollar
Turners Invests in Quashed Online Insurance Platform
PGW Reports on Challenging Year
Arvida Announces Executive Team Changes