Air China can’t buy China Eastern stake until August
A “lock-up” clause in a deal between China Eastern Airlines’ board and Singapore Airlines parent Temasek Holdings will prevent Air China from acquiring a stake in CEA until August.
News outlets reported that China Eastern, which is looking to sell nearly a quarter of its business, won’t be able to sell to Air China parent China National Aviation, despite the fact that CNA has outbid Singapore for the Shanghai-based airline.
“As part of a lockup clause in China Eastern’s attempt to sell a stake to Singapore Airlines Ltd. and its parent, Temasek Holdings Pte. Ltd., the company can’t accept an offer from rival carriers until Aug. 9,” said a report in the Wall Street Journal Monday.”
CNA is already a shareholder in China Eastern and that group spearheaded a bid that would see China Eastern earn 32 percent more than it would have under the Singapore Airlines bid. But the China Eastern board, which accepted the Singapore Airlines bid, is reported to be loathe to sell a stake to its in-country rival. In any case, last week China Eastern’s minority shareholders blocked the sale of 24 percent of the company to Air China.
According to the WSJ report, both China Eastern and Singapore are interested in consummating a deal, but Singapore has indicated it is unwilling to raise its bid price. Singapore sees China Eastern as a strategic partner in eastern China, a move that could allow the airline to have twin hubs in two of Asia’s air cargo capitals.