Air China parent places counter bid

Air China's parent firm announced its intent to make a counter bid for a stake in China Eastern, after shareholders in the Chinese carrier rejected Singapore Airlines' (SIA) bid in a meeting held earlier this week.

SIA and Temasek signed a preliminary deal in September last year for a stake in China Eastern. Its bid was rejected by 77% of stakeholders who claimed the bid of US$923 million (HK$3.80 per share) undervalued the carrier.

Air China's parent firm, China National Aviation Corp (CNAC) said it would put forward a bid of at least HK$5.00 a share for a stake in the Shanghai-based carrier. An unnamed spokesperson told local media the bid will be placed within two weeks.

In a statement, SIA said it was disappointed that the bid was turned down by shareholders, but added that it "will continue to support the building of a relationship with China Eastern, noting that the airlines are still mutually willing to develop the relationship".

In addition, China Eastern chairman Li Fenghua was quoted in local media as distancing the company from Air China, saying the other domestic airline was no better than his carrier in terms of management expertise and branding.