Qatar Airways gets seat for any Cathay dealmaking

Kingboard Holdings

06/11/2017 03:33

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are his own.) 
    By Quentin Webb 
    HONG KONG, Nov 6 (Reuters Breakingviews) - The Middle 
Eastern group is buying 9.6 pct of the troubled Hong Kong outfit 
for $661 mln. Building small stakes in rival airlines rarely 
works well. But should top shareholder Swire seek to sell, it 
now has a second party to play off against Air China, Cathay's 
other big backer. 
  
    Full view will be published shortly. 
    On Twitter https://twitter.com/qtwebb 
     
    CONTEXT NEWS 
    - Qatar Airways said on Nov. 6 it had agreed to buy 9.6 
percent of Hong Kong rival Cathay Pacific Airways. In a 
statement, Chief Executive Akbar Al Baker called the purchase a 
"financial investment", and noted both airlines were part of the 
Oneworld alliance. 
    - The seller, Hong Kong-listed Kingboard Chemical, said 
Qatar Airways would pay HK$13.65 a share, or nearly HK$5.2 
billion ($666 million) in total. Kingboard began building its 
stake last December, calling Cathay a "good investment 
opportunity". It said it would record a gain of about HK$800 
million on the sale. 
    - Cathay Chief Executive Rupert Hogg said the two carriers 
already worked closely together and "we look forward to a 
continued constructive relationship". 
    - Cathay shares fell 3.9 percent by mid-morning in Hong 
Kong, to HK$12.68. Cathay is 45 percent owned by Hong Kong 
conglomerate Swire Pacific. Cathay also has cross-shareholdings 
with mainland carrier Air China, which owns just under 30 
percent.     
    - For previous columns by the author, Reuters customers can 
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
Qatar Airways buys 9.6 pct stake in Cathay Pacific - Kingboard 
Chemical     urn:newsml:reuters.com:*:nL3N1NC05K 
Kingboard statement    http://www.hkexnews.hk/listedco/listconews/SEHK/2017/1106/LTN20171106027.pdf 
Qatar Airways statement    https://www.qatarairways.com/en/press-releases/2017/nov/qatar-airways-announces-its-acquisition-of-9-61--of-cathay-pacif.html?activeTag=Press-releases 
BREAKINGVIEWS - Qatar's American Airlines ticket not just 
politics     urn:newsml:reuters.com:*:nL3N1JJ4DA 
BREAKINGVIEWS - Cathay's ugly first half points to further woes  
   urn:newsml:reuters.com:*:nL4N1L30SF 
BREAKINGVIEWS - Cathay can't fly around Hong Kong's fading hub   
  urn:newsml:reuters.com:*:nL3N1GS1MW 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Editing by Pete Sweeney and Katrina Hamlin) 
 ((quentin.webb@thomsonreuters.com;)(Reuters 
Messaging:)(quentin.webb.thomsonreuters.com@reuters.net)) 
 
Keywords: CATHAY PACIFIC M&A/BREAKINGVIEWS