News Corporation has suspended talks with Singapore Airlines (SIA) on the carrier's proposed purchase of the media group's 50% stake in Ansett Holdings until issues concerning Ansett's other 50% owner, Air New Zealand (ANZ), are resolved.
The talks collapsed after News Corp claimed its dealings with SIA were being clouded by negotiations between SIA and ANZ over Ansett's future ownership.
In March, SIA announced plans for a $325 million deal to buy News Corp's 50% stake. ANZ indicated it might block the SIA purchase by taking up its pre-emptive right to News Corp's stake.
News Corp's chairman and chief executive officer Lachlan Murdoch says the company is disappointed that the two carriers "had not yet resolved issues between them concerning Ansett Airlines". The company is prepared to reopen talks with SIA if Air New Zealand and SIA "can agree on how they wish to proceed", says Murdoch.
The SIA deal was complicated this month when Brierley Investments (BIL) said it was raising its stake in ANZ to 60%. This move, seen as a way of resolving the Ansett ownership issue, would allow SIA majority shareholder Temasek Holdings to increase its stake in ANZ to 25%. If ANZ exercised its right to take 100% of Ansett, Temasek would have 25% of Ansett.
Singaporean sources believe the Australian Government pressured News Corp to call off the deal, believing that increased ANZ equity through Brierley would not add as much value to cash-starved Ansett as would SIA.
ANZ says it "remains interested in the outstanding 50% of Ansett as part of the development of a robust Australasian system". The airline adds that it "will discuss with SIA how the combined interests of ANZ, Ansett Australia and SIA can best be served".
News Corp, meanwhile, has expressed satisfaction with Ansett's performance, possibly signalling an increase in the $325 million price of the 50% stake.
"We are particularly pleased with the improvement in the Ansett businesses," says Murdoch.
Source: Flight International
