Hong Kong-listed parents refute Cathay Pacific takeover speculation

Hong Kong-listed parents refute Cathay Pacific takeover speculation    Air China, Cathay Pacific, China National Aviation Co. (CNAC), CITIC Pacific and Swire Pacific have reacted to speculation concerning potential takeover activity by issuing a joint statement at the request of the Hong Kong Stock Exchange.
   The South China Morning Post had reported that Swire Pacific Ltd, Cathay Pacific’s majority shareholder, was close to an agreement to sell the Hong Kong-based airline to Air China. The newspaper also reported that Cathay Pacific would first buy local competitor Dragonair and then be included as a part of the mainland group.
   The companies said they “confirm that discussions are taking place about operational cooperation between Cathay Pacific and Air China and about the realignment of shareholdings in Cathay Pacific, Air China and Dragonair. However, there is no agreement or arrangement which is discloseable under the listing rules.”
   “In particular, Swire Pacific intends to remain the principal shareholder in Cathay Pacific in the long term; Air China understands China National Aviation Holding Co. intends to remain the controlling shareholder of Air China in the long term; although CITIC Pacific may reduce its interest in Cathay Pacific, it intends to remain in the long term a significant shareholder in Cathay Pacific; and Air China has no current intention to privatize CNAC.
   “The discussions between Air China and Cathay Pacific about operational cooperation are designed to strengthen cooperation between them in various business and operational areas. It is intended that Dragonair is to maintain its brand and identity and that it will remain a principal airline in the Hong Kong and China mainland aviation markets,” the parties said in the joint statement.
   The Hong Kong Stock Exchange advised that shareholders of and potential investors should “exercise caution” when dealing in or investing in the shares of all the interested companies.