Cathay Pacific Airways Ltd has said it won't bid for a stake in China Eastern Airlines Corp.
This ends speculation about a takeover battle after the Shanghai carrier first agreed upon a share sale to Singapore Airlines Ltd.
"A proposed acquisition by Cathay Pacific Airways Ltd together with China National Aviation Holding Co of shares in China Eastern Airlines Corporation Ltd will not now proceed," said Cathay Pacific in a filing to the Hong Kong Stock Exchange on Monday night.
The filing was in response to a statement posted on Friday to suspend stock trading pending the announcement of a proposed transaction.
Singapore Airlines Ltd and parent Temasek Holdings Pte have signed to pay about US$918 million for a combined 24-percent stake in China Eastern Airlines Corp, the companies announced early this month.
China Eastern will place 1.235 billion new Hong Kong-listed shares with Singapore Airlines and 649 million shares with Temasek at HK$3.80 (49 US cents) each, according to the agreement. After the deal, the Singapore carrier will hold a 15.7-percent stake in China Eastern's total shares outstanding, while Temasek will have an 8.3-percent stake.
The sale still needs approval from the company board.
China Eastern's shares tumbled to the 10-percent daily loss limit to 19.75 yuan yesterday in Shanghai.
It slumped 14.71 percent to HK$7.42 in Hong Kong after surging 51 percent last week over speculation of Cathay Pacific's acquisition move.
(Shanghai Daily September 26, 2007)