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UPDATE 2-Singapore Airlines lifts stake in Virgin Australia to 19.9 pct

04/24/2013 | Reuters

* Singapore increases Virgin stake to 19.9 pct

* Says no plans to lift holding further

* Follows Virgin's purchase of 60 pct stake in Tiger

(Updates with Singapore equal largest shareholder with Air New
Zealand)

SYDNEY, April 24 (Reuters) - Singapore Airlines Ltd
has lifted its stake in Virgin Australia Holdings Ltd
to 19.9 percent, boosting its influence at the carrier
at a time of industry jostling to secure lucrative routes in
Southeast Asia.

The purchase makes Singapore Airlines the joint largest
shareholder in Australia's No.2 airline, with Air New Zealand
also owning a matching stake that is just under the
limit allowed before a full takeover must be launched.

Australia's airline industry has been a battleground for
global airlines seeking partnerships in recent months, with
Qantas Airways Ltd establishing a wide-ranging alliance
with Emirates Airlines.

Singapore Airlines bought an additional 9.9 percent for
A$123 million ($126 million) from Richard Branson's Virgin
Group. Branson will retain a 12.4 percent holding.

A spokesman for the company said it had no plans at this
point to further increase its holding. The deal is subject to
approval from Australia's Foreign Investment Review Board.

"While it is currently unclear whether Branson is looking
for a complete sell down, the transaction moves more of the
voting power into the hands of the strategic operating
partners," Macquarie Equities analysts said in a note.

"At this point there is no talk of a takeover from any of
the parties, however, the interest from the partners does
confirm the strength of Virgin Australia's virtual international
network going forward, as it attempts to compete effectively
with Qantas's new reach given the Emirates deal," they added.

Singapore Airlines has been keen to establish a stronghold
in Australia to secure passenger feed on to its long-haul
services. It has added more double decker Airbus A380s and
increased frequencies in the Australian market, hoping to
capture passengers disenchanted with Qantas' switch from
Singapore to Dubai as its new transit hub.

The move comes a day after Virgin received competition
regulator approval to buy a controlling stake in Tiger Australia
from Singapore Airlines' budget associate, Tiger Airways
Holdings Ltd.

The deal, which must also be approved by the FIRB, marks a
return an effective duopoly of Qantas and Virgin by removing
Tiger as an independent third player.

Singapore Airlines, which first bought a 10 percent stake
in Virgin in late 2012, is paying A$0.48 per share, a 5.5
percent premium to Virgin Australia's last traded price.

The stock was up 2.2 percent in morning trade at A$0.47.

Analysts had believed that Air New Zealand's holding had
been diluted through a recent issue of shares by Virgin to
SkyWest and Singapore, but the carrier said on Wednesday it
maintained its holding through transactions executed
simultaneously with the share issue.

($1 = 0.9748 Australian dollars)

(Reporting by Lincoln Feast and Jane Wardell in Sydney.
Additional reporting by Anshuman Daga in Singapore.; Editing by
Edwina Gibbs)


© Thomson Reuters 2022 - All rights reserved.

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