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Long-drawn-out China Eastern, Singapore Airlines deal fails

(Xinhua)
Updated: 2008-08-11 06:53

China Eastern Airlines (CEA) announced on Sunday that the stake sale plan to Singapore Airlines(SIA) and Lentor Investments had failed.

The preliminary agreement would become invalid if no further progress was achieved as of Saturday, the expiring date, according to a CEA statement.

SIA and Temasek, Singapore's state-linked investment firm and the parent of Lentor Investments, signed a preliminary deal in September to take a 24-percent stake in the Shanghai-based CEA for US$923 million, or HK$3.80 per share.

The bid was voted down by CEA shareholders in January, however, as they believed the offer price did not reflect the fair value of CEA.

But SIA did not plan to raise its offer price agreed in the framework agreement, SIA's vice president for public affairs Stephen Forshaw said early this week.

Despite the failure, CEA would continue to look for strategic investors, increase cooperative chance with world leading airline companies and strive to improve the company's competitiveness on the global market, it said.