AIZ (Air NZ) secures substantial stake in VBA

[Slats7]

http://www.asx.com.au/asxpdf/20110120/pdf/41w8z9l4vl6s47.pdf

Interesting move considering AIZ have no interest in VBA takeover bid.

 

[dontwanttoregister]

Air New Zealand takes stake in Virgin Blue

May the speculation on the implications commence!

From smh.com.au (I'm unable to provide a link):

Air New Zealand buys stake in Virgin

January 20, 2011 - 5:09PM Air New Zealand has bought a substantial stake in budget carrier Virgin Blue and plans to raise that stake to between 10 per cent and 14.99 per cent.
Air NZ said today it had no intention of making a full takeover offer and had received Australian Foreign Investment Review Board approval for the transaction.
"The investment in Virgin Blue is part of Air New Zealand's strategy to develop scale and reach in this region. The Tasman alliance with Virgin Blue was the first step in this strategy, Air New Zealand chief executive Rob Fyfe said.
A 15 per cent stake in Virgin Blue is currently worth around $143 milion based on Virgin Blue's last closing price.
Reuters

 

[drron]

I hope its not like the last time they took a stake in an Aussie airline
Maybe an omen but in a clean up today I found our old Global Rewards cards-I was silver but somehow mrsdrron got to gold.

 

[thewinchester]

NZ buys stake in DJ

You hear that kids? I hear the ghost of Ansett rattling chains in the background.

Air NZ buys up stake in Virgin Blue
ABC News via Yahoo Finance
finance reporter Alicia Barry, On Thursday 20 January 2011, 18:00

Air New Zealand says it has no intention of launching a takeover bid for Virgin Blue after taking a major stake in the company.

The airline notified the Australian Securities Exchange late on Thursday afternoon that is had received regulatory approval to buy up to 14.99 per cent of Virgin Blue.
Under Australia's foreign investment rules, a local airline can have no more than 49 per cent foreign ownership.

Richard Branson's Virgin Group, which is based in the UK already has a 26 per cent shareholding.

The company's CEO Rob Fyfe says he has spoken to Virgin Blue's executives to assure them the move is simply a bid to increase its reach in the region, not to pave the way for a merger.

"The investment in Virgin Blue is part of Air New Zealand's strategy to develop scale and reach n the region. The Trans-Tasman Alliance was the first step in this strategy," he said in a statement.

 

[nlagalle]

Re: NZ buys stake in DJ

You hear that kids? I smell the ghost of Ansett rattling chains in the background.

It was the first thing I thought of when I saw your headline!

 

[cove]

Re: NZ buys stake in DJ

I would not call this a total game changer but it will help Virgin Blue in its track to become relevant to our AFF community with product upgrades.
Cuddle Class here we come?

 

[cove]

I forgave AIZ long ago.
American Express Platinum did us 4 First Class tickets to America for a total of about $20k so Air New Zealand redeemed themselves with that one off deal that they put together for our family.
Now they are back in Australia with Virgin Blue which has struggled to make money with their current model.
Bring on those changes JB.

 

[Oneworldplus2]

Wow, interesting development.

I suppose with the SP hovering around the 40-45 cent level for the past 4 months (~Sep, Oct, Nov, Dec, Jan), AIR NZ or even SQ for that matter, could have got a much better deal a few months ago when the SP was hovering around the 25-30 level for a similar period (3 months ~June, July, August).

 

[pauly7]

Let's all pray it doesn't end up another 'Hit and Run'

Otherwise we'll end up with Tiger as the new Virgin (shudder).

 

[oz_mark]

Let's all pray it doesn't end up another 'Hit and Run'

Otherwise we'll end up with Tiger as the new Virgin (shudder).

I think the world has moved on a bit since then, and it doesn't sound as though ANZ is after a controlling interest.

More interesting is what it may mean for alliance prospects.

 

[pauly7]

I think the world has moved on a bit since then, and it doesn't sound as though ANZ is after a controlling interest.

More interesting is what it may mean for alliance prospects.

I was kinda joking... but definitely not what anyone would want to see happen again regardless!

Yes Air NZ PLEASE force DJ somehow some way into Star!!!

 

[kamchatsky]

I was kinda joking... but definitely not what anyone would want tosee happen again regardless!

Yes Air NZ PLEASE force DJ somehow some way into Star!!!

Given that now NZ has significant holdings, the only way I can see DJ going is to *A. Cannot see how DJ would go to SkyTeam.

 

[Oneworldplus2]

Given that now NZ has significant holdings, the only way I can see DJ going is to *A. Cannot see how DJ would go to SkyTeam.

"If" they join an alliance.

The DJ brand doesn't seem too fussed on Alliances (atm). As CrazyDave has also mentioned throughout this forum on several occasions, DJ want to have a partner carrier in Asia, Middle East (Etihad), USA and Europe. But this new Air NZ news throws it in a different direction.

 

[Andyzx]

Maybe it will change its name to Virgin New Zealand or Air Virgin – has a certain ring about it…:mrgreen:. I think it’s more like Air NZ wants a say in the local scene, rather than a take over or effective control.
Branson who still has a stake in VBA is looking for alliances for Virgin America and Atlantic. I'm still not convinced of a *A tie up though, its not there way:-|

 

[jakeseven7]

Now they are back in Australia with Virgin Blue which has struggled to make money with their current model.
.

I wouldn't go that far, I mean DJ has managed to pull in some coin, especially a few years ago, less so now but I think really their more recent issues have been all around poor strategy (BG lost the plot towards the end with V Aus, Premium Y and Live2Air) - and this has made it very easy for QF to keep Virgin firmly in the 'LCC' box and continue to premium price against them. Then when the GFC happened DJ were left very vunerable.

That's why JB was brought in - to change them (which I'm sure he will when the relaunch is announced). He has fired so many people in the Virgin Village and brought in new minds to help rid the company of the LCC mindset. I can't wait to see what is next.

I guess the stake is not really suprising... Air NZ drives DJ out of NZ, ties up with them on TT and now buys them.... I mean Qantas (tried to) did the same thing to Air NZ but the regulators said no so they sold them....!

It could hardly have happened the other way around, DJ just doesn't have the dosh.

 

[pauly7]

Anyone interested should pick up a copy of the AFR today which has some very interesting analyisis.

Basic points made:

- DJ were not consulted on the buy up, so classed as a predatory buy.

- Questions the logic of a 80% government owned enitity buying a business that operates in such a volatile environment and hasn't returned dividends since 2008 and even then was only 2 cents.

- Suggests that JB will not actually be that happy with the move (though it is seen a as a vote of confidence in his strategy), as JB has been apparently been seeking the same from Ethiad, he is chummy with the CEO and they have a lot more $$$$.

- Concludes by stating DJ would much rather have a oil rich airline owning them than a cash strapped government operated airline.

- Speculates that Air NZ have bought the stake as a move to block Ethiad in a 'panic' move that a combined QF Group and a DJ/Ethiad tie up could really box Air NZ in.

 

[cove]

Yes Pauly7 there is a 49% limit on "FOREIGN OWNERSHIP" so Etihad would only be able to get about 9% tops as Branson is there and now AIZ is there.

 

[medhead]

Anyone interested should pick up a copy of the AFR today which has some very interesting analyisis.

Basic points made:

- DJ were not consulted on the buy up, so classed as a predatory buy.

I am not sure of the exact details. But that is probably just something to do with the takeover rules. I think an agreed purchase of >9% requires a takeover bid to be made to all shareholders. Or something like that.

It's been a while since followed such things, so my recollection might be wrong.

 

[browski]

Methinks the speculation that Richard Branson's chat to a major alliance has spooked ANZ. If Branson opts for VS to join with Skyteam (and DJ followed suit) then ANZ would be left out in the cold with no Aussie partner and with large hostile opponents.
Well played ANZ.

 

[cove]

An automatic takeover provision applies if one party buys more than 19.99% of an ASX listed company other than under the 3 per cent creep rule every 6 months.