CNAC offers higher price for Eastern

By Wang Zhenghua (China Daily)
Updated: 2008-01-07 07:23

SHANGHAI: The parent company of the nation's largest airline company, Air China, said Sunday it plans a make a counter offer of HK$5 per share - or a third more - for China Eastern Airlines if shareholders rejected a Singaporean deal.

In a statement last night, China National Aviation Corp (CNAC), which owns 12 percent of China Eastern's Hong Kong-listed shares, said it would submit a bid within two weeks if Tuesday's shareholding meetings rejected China Eastern's union with Singapore Airlines and Singaporean investment agency Temasek.

The move adds further uncertainties to the deal between the nation's third-largest airline company and its potential Singaporean partners, who are bidding for a 24 percent stake in China Eastern at HK$3.80 per share.

CNAC said it is dedicated to bringing about a full-front partnership between China Eastern and its biggest rival Air China as well as the Beijing-based company's partners, in particular to establish Shanghai as an international airline hub.

"If the Singaporean deal is not approved at the shareholder meetings, we propose to replace Temasek and Singapore Airlines with CNAC by becoming China Eastern's new partner," CNAC said Sunday.

CNAC also said Sunday that to maximize the results of its partnership with China Eastern, it would "establish Shanghai as an airline hub in joint efforts with China Eastern to achieve mutual benefits and win-win situation to all parties".

China Eastern was not available for comment Sunday, but its chairman Li Fenghua told reporters earlier that it would not accept any offer proposed by Air China and its parent.

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