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Air China parent places ad to plead with China Eastern on tie-up
2008-03-02
The parent company of Air China used a newspaper advertisement Saturday to plead with the directors of China Eastern to review its rejection of a proposed alliance between the two carriers. China National Aviation Corp (CNAC), parent of flagship carrier Air China, insisted its bid was sincere in an ad placed in the South China Morning Post. "CNAC has been highly sincere in seeking a strategic partnership with China Eastern Airlines," the ad in the English-language daily said. "CNAC hopes that the board of directors of China Eastern Airlines will seriously review and give full consideration to the proposal." CNAC called on China Eastern to hold a meeting as soon as possible to discuss the details. China Eastern, the country's third largest carrier, Tuesday rejected the alliance and said the bid "lacks sincerity, planning and mutual trust and it would be hard to create a basis for cooperation". China Eastern added it would continue seeking strategic investors to strengthen its core business, offering a glimmer of hope for a deadlocked plan for a tie up with Singapore Airlines (SIA). SIA and Temasek Holdings, Singapore's state-linked investment firm, signed a preliminary deal in September to take a 24 percent stake in China Eastern for 923 million US dollars. But minority shareholders rejected the bid, worth 3.80 Hong Kong dollars per share in January, after an intervention by CNAC. Last month CNAC proposed to buy 2.985 billion new Hong Kong listed shares in China Eastern for at least five Hong Kong dollars each after China Eastern's shareholders voted down the deal with SIA. China Eastern will receive at least 14.9 billion Hong Kong dollars (1.9 billion US dollars) in cash under CNAC's proposal. CNAC also suggested the two carriers integrate their cargo business to set up a joint venture and cooperate in codesharing, optimisation of route networks, maintenance and ground service.
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