Tigerair in talks to sell Philippines associate airline
It owns 40% of Tiger Philippines.
According to OCBC Investment Research, an online Philippine news portal, InterAkyson, reported last Friday that Cebu Pacific is in talks to acquire Tigerair Philippines (TRP) from Tiger Airways Holdings (TR). The article quoted an executive director of the Civil Aeronautics Board as saying that Cebu Pacific has filed an application to acquire 100% of TRP.
The director also said that the CAB is evaluating the planned buyout and that the agency expects to finish the review within the next two weeks. TR has confirmed that it is in the midst of negotiating a proposed transaction involving TRP but emphasised that no definitive agreement has been signed yet. TR owns 40% of TRP.
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To recap, TRP, like TR’s two other associate airlines, Tigerair Mandala (TRM) and Tigerair Australia (TRA), has been facing persistent operational challenges, specifically the lack of demand growth, competitive fare pressures and expansion in industry capacity.
For the latest quarter, 2QFY14, losses for TRP widened to S$9.0m despite narrowing losses for the previous three quarters (-S$8.3m in 3QFY13; -S$7.3m in 4QFY13; -S$6.0m in 1QFY14). We believe that a sale of TRP should be a positive for TR, given that TRP operates in a market suffering from overcapacity.
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Wing Hang Bank tumbles after OCBC said to bid: Update
Written by Bloomberg
Monday, 06 January 2014 12:22
Wing Hang Bank shares fell the most in almost 20 months in Hong Kong after Oversea-Chinese Banking Corp. was said to bid less for the family-run lender than its owners are seeking.
Wing Hang dropped as much as 6.1 %, the biggest intraday slump since May 2012, to HK$110 ($18). The stock traded 1.4 % lower at HK$115.60 ($18.91) at 11:36 a.m. local time before trading in the shares was suspended. OCBC, Southeast Asia’s second-biggest lender, fell 1.5 % to $9.87 in Singapore, before its trading was halted pending an announcement.
OCBC conducted due diligence and bid less than the two times book value Wing Hang was seeking, two people familiar with the matter said Jan. 3. The Hong Kong lender’s HK$35.7 billion ($5.8 billion) market capitalization is about 1.7 times estimated 2013 book value, data compiled by Bloomberg show. The purchase would be OCBC’s biggest acquisition, giving it a network of 70 branches in Hong Kong, Macau and mainland China.
“It seems there are not many other bidders for Wing Hang and if the bidding price is 1.8 or 1.9 times, there’s only 10 % potential upside for the stock,” Edmond Law, an analyst at UOB Kay Hian Holdings in Hong Kong, said by phone. “Most investors will start to take profit given that there’s a lot of uncertainties.”
Anbang Insurance Group, a Beijing-based insurer, indicated it wouldn’t pay more than 1.7 times the book value of Wing Hang, two people with knowledge of the matter said last month. Anbang said Jan. 3 it spent 1.43 billion yuan ($299 million) to increase its stake in China Merchants Bank Co. to 7 % from 6.36 %.
ATTRACTING INTEREST
Hong Kong’s family-run banks, squeezed for years by larger competitors including HSBC Holdings Plc and Bank of China, are attracting interest from acquirers as the city’s role in cross-border financing expands. Yue Xiu Group agreed in November to buy a majority stake in Chong Hing Bank for US$1.5 billion ($1.9 billion), the first acquisition of a Hong Kong lender since 2009.
The family of Wing Hang Chairman Patrick Fung, its affiliates and Bank of New York Mellon Corp. together hold about 45 % of shares in the Hong Kong lender.
Its presence across southern China’s Pearl River Delta makes it a more attractive target than other smaller family- owned banks in the city, Grace Wu, an analyst at Daiwa Capital Markets Hong Kong, said by phone on Sept. 17.
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