In a rare movement, China Eastern Airlines said it foresaw "a
gloomy results from a vote on the proposed sale of shares to
Singapore Airlines and Temasek."
In an email delivered to China Daily this morning,
China Eastern said that the sales proposal will "very likely be put
off temporarily".
According to the email, a vast number of shareholders that
previously supported the deal have "changed their minds" after
China National Aviation Corp (CNAC), Air China's parent company,
said on Sunday it plans to make a counter offer of HK$5 per share
for China Eastern Airlines.
The counter offer is a third higher than the HK$3.8 offered by
Singapore Airlines if the China Eastern-Singapore Airlines deal is
rejected.
In addition, CNAC, which owns a 12.07 percent stake in China
Eastern, is expected to vote against the deal, and as such the deal
is not likely to pass, said China Eastern in the statement.
The shareholder meeting to discuss the deal will be held at 1:30
pm today as scheduled. Trading of both A and H shares of China
Eastern is suspended today.
China Eastern said in a statement to the Shanghai Stock Exchange
today that the company has not received any "formal" similar
proposal from other suitors.
In a statement last night, China Eastern challenged the
authenticity of the proposal raised by CNAC and suggesting CNAC
hopes to block cooperation with Singapore Airlines.
(China Daily January 8, 2008)
