Air New Zealand has acquired a substantial shareholding in Virgin Blue, but denies any intention for a takeover bid
January 21, 2011
Air New Zealand has acquired a substantial shareholding in Virgin Blue, but denies any intention for a takeover bid.
The airline notified the ASX and New Zealand Stock Exchange yesterday that it has become a substantial shareholder in Virgin Blue, as part of a planned acquisition of a shareholding between 10 and 14.99 percent.
It today confirmed further shares were acquired off-market last night which increased Air New Zealand’s relevant interest to 14.9 percent.
The purchase of the shareholding was completed from existing cash resources.
Air New Zealand CEO Rob Fyfe has confirmed that there is no intention to go over 14.99 percent; an amount approved by the Australian Foreign Investment Review Board.
“This is simply an investment in Virgin Blue that reinforces Air New Zealand’s strategy to grow its business in Australasia which is continually evolving as a single aviation market,” Fyfe says.
He says the Tasman alliance with Virgin Blue was the first step in this strategy.
“This investment cements the important relationship between our two airlines and demonstrates the confidence we have in Virgin Blue and its management to grow their business both within the Tasman alliance and beyond the scope of the alliance.”
Fyfe says Air New Zealand will not be seeking representation on the Virgin Blue Board for at least six months and notes that any representation will be
a decision for the Virgin Blue Board and shareholders.
Air New Zealand’s Chief Financial Officer Rob McDonald says the cost of entry into Virgin Blue is $145 million or 44 cents per share.
