Virgin Australia (VAH) continues to be stalked by its big three holders – Air New Zealand (AIZ), Etihad and Singapore Airlines.
Yesterday it was confirmed that Air New Zealand had lifted its stake in Virgin to 25.9%, the maximum allowed by the Foreign Investment Review Board.
The increase followed a series of on-market share purchases from unnamed parties.
Air NZ’s latest round of purchases began in February at 34.55c a share and finished last week at 44c a share.
Air NZ had already been the largest shareholder in Virgin with a 24.55% stake before that buying spree, and it’s clear that has helped push up the value of Virgin shares in recent months.
Also helping was the news that Qantas (QAN) would be freezing capacity in the domestic market for the September quarter, leading to analysts claiming this will push up airfares.
The biggest single purchase made was a line of 19 million shares last week in the tightly-held stock.
Singapore Airlines and Etihad Airways hold stakes of 22.17% and 21.24% respectively.
Sir Richard Branson’s Virgin Group still has a 10% stake, having earlier sold shares to Singapore Airlines and Etihad. There is no sign Branson sold into the Air NZ buying spree.
VAH 1Y – Net closing in on Virgin Australia
Air NZ can’t lift its Virgin stake any further without applying for fresh approval from FIRB and the competition regulator, the ACCC.
Both Singapore Airlines and Etihad have permission to boost their stakes to 22.9% each, so they have a little more buying capacity.
Etihad has a busy roster of deals at the moment. It is now trying to complete a deal to buy 49% of the loss-making Italian airline, Alitalia. That is a black hole of poor work practices and high costs.
But there is now speculation that Etihad could buy a stake in struggling Malaysian Airlines in the wake of the MH370 air disaster, and huge operating losses including a $US134 million first quarter loss.
Etihad management has denied it, but the deal continues to be raised in media stories.
Virgin shares closed steady at 43c yesterday on the ASX.
