Just now:

Qatar Airways buys 9.6 percent stake in Cathay Pacific: Kingboard Chemical

https://www.reuters.com/article/us-cathay-pacific-m-a-qatar-airways/qatar-airways-buys-9-6-percent-stake-in-cathay-pacific-kingboard-chemical-idUSKBN1D601T

Not surprising Kingboard walks away from CX.

They had been critical of Swire Pacific and their perceived poor management of CX. Earlier this year Kingboard offered buying the 45 percent stake owned by Swire but was rejected. Atleast they pocketed about ~USD$105mil gain on their shares with sale to QR.

QR is clearly a loyal OneWorld Alliance member!

Well done QR.

EK413

Are they doing this to block CX from leaving oneworld and consequently blocking CZ from joining?

MH next? hm....

I wonder whats the end-game in purchasing a stake in CX?

I doubt "OneWorld" was even a blip in QR's thought process during this.

QR doesn't give a damn about the welfare of OneWorld, QR is looking out for QR.

LAX772LR wrote:

I doubt "OneWorld" was even a blip in QR's thought process during this.

QR doesn't give a damn about the welfare of OneWorld, QR is looking out for QR.

I doubt it too, more so to do with further access to the Asian market.

Just interesting QR have 20 percent stake in British Airways IAG, 10 percent of Latam Airlines Group, and was in recent talks with AA but opted to pull out.

Anyhow well done QR.

EK413

EK413 wrote:

and was in recent talks with AA but opted to pull out.

LOL, that's cute.

But hey, I guess being essentially told to go to hell, is a reason to "opt out" of such talks.

At the risk of looking for an overly simplistic explanation, we have an airline that has had access to its main hub curtailed by restrictions on neighbors airspace. The political situation that lead to that is getting less stable. Diversifying into being a holding company as well as an under-siege airline may just be a good business decision.

A lot of money to burn there. Surprised they haven't bought into as or b6 yet.

Not surprising those money would have to go somewhere. In terms of a financial investment, CX makes a poor subsitute for AA, given how little competition there is in the US vs. asia. No idea why they didnt just go ahead and acquire a stake in AA anyway, its a free market.

downdata wrote:

No idea why they didnt just go ahead and acquire a stake in AA anyway, its a free market.

....because you (generally) can't force entities to sell, if they don't want to.

LAX772LR wrote:

downdata wrote:

No idea why they didnt just go ahead and acquire a stake in AA anyway, its a free market.

....because you (generally) can't force entities to sell, if they don't want to.

QR respected AA’s decision. If they really wanted to get a piece of AA, they could’ve done it, even though it would be a bit less than they originally wanted. DP’s badmouthing towards QR can’t do anything in the way of blocking a stake purchase, it was up to AAB if he wanted to listen or not.

FoxtrotSierra wrote:

QR respected AA’s decision. If they really wanted to get a piece of AA, they could’ve done it

From who? Who do you know that was selling sufficient shares to get a level of influence that AA would give the slightest concern about?

LAX772LR wrote:

downdata wrote:

No idea why they didnt just go ahead and acquire a stake in AA anyway, its a free market.

....because you (generally) can't force entities to sell, if they don't want to.

What? AA shareholders. Hedge funds, banks, pension funds... Blackrock will sell their stake in a heart beat if you offered 20% premium to market

LAX772LR wrote:

FoxtrotSierra wrote:

QR respected AA’s decision. If they really wanted to get a piece of AA, they could’ve done it

From who? Who do you know that was selling sufficient shares to get a level of influence that AA would give the slightest concern about?

Lets see... T rowe rice, primecap, berkshrine hathaway, vanguard, blackrock, FMR, state street? 74.96% of AA is owned by funds, and 24% is public. Doug parker and the rest of the insiders own only 1.03% of AA.

The kingboard share were originally acquired on the public market, so they do not comes with any board seat. With Swire and Air china owns a combined 74.9% of CX, I highly doubted they will release control of any board seat during future shareholders meeting. So essentially this purchase doesn’t give Qatar more access to China as some article implied, because Qatar don’t have any say in the management even with almost 10% holdings (very similar to what happen to Kingboard when they purchase these shares, kingboard can yell and complain in the media, which kingboard did, and it make the Kingboard CEO looks silly because the stuff that he say to the media, shows that he has no idea about the CX management stucture).

Anyway, of course anything can change but unless CX / Swire and Air China decided to give Qatar one or more board seat, Qatar share is just a meaningless purchase from the open market, won’t gain them anything.

downdata wrote:

if you offered 20% premium to market

Which even an ME3 carrier isn't reckless enough to do, hence not doing it, hence the statement.

These aren't emotion-based decisions, contrary to what these (ridiculous) posts seem to imply.

Hey guys,
What a contrast: Etihad versus Qatar!
Alitalia, Air Serbia, Darwin, Virgin Australia etc versus British Airways, LATAM, Cathay Pacific ... And errrr, Meridiana!
Still...
Wonder if Qantas is on the QR's Wishlist?
Cheers,
Bunumuring

Kingboard never had any intention of keeping its shares long term, a quick turnaround investment for them. In terms of what this means I wouldn't read into very much. QR is attempting to diversify it's income as the political situation remains unclear.

QR would be a passive shareholder. Air China and Swire will simply ignore it, just like they have ignored Kingboard. However, Air China and Swire do not hold hostile intention with QR, so if QR, as a shareholder now, came up with good idea on how any co-operations would mutually benefits CX and QR, I am sure Air China and Swire, as majority shareholder of CX, will consider the proposals.

Why 9.6% Is there any significance (financial, regulatory, symbolic, etc.) to obtaining that particular share size? -ir

IslandRob wrote:

Why 9.6% Is there any significance (financial, regulatory, symbolic, etc.) to obtaining that particular share size? -ir

That’s the holding the seller had

https://asia.nikkei.com/Markets/Nikkei- ... -Kingboard

Geoff

Geoff1947 wrote:

IslandRob wrote:

Why 9.6% Is there any significance (financial, regulatory, symbolic, etc.) to obtaining that particular share size? -ir

That’s the holding the seller had

https://asia.nikkei.com/Markets/Nikkei- ... -Kingboard

Geoff

Thanks, I hadn't seen that article. Now the 9.6% makes sense. I suppose QR could conceivably increase their investment in CX. Regards. -ir

U

bunumuring wrote:

Hey guys,
What a contrast: Etihad versus Qatar!
Alitalia, Air Serbia, Darwin, Virgin Australia etc versus British Airways, LATAM, Cathay Pacific ... And errrr, Meridiana!
Still...
Wonder if Qantas is on the QR's Wishlist?
Cheers,
Bunumuring

I bet that would make EK feel rather uncomfortable of WR was entrenching on QF.

bunumuring wrote:

Hey guys,
What a contrast: Etihad versus Qatar!
Alitalia, Air Serbia, Darwin, Virgin Australia etc versus British Airways, LATAM, Cathay Pacific ... And errrr, Meridiana!
Still...
Wonder if Qantas is on the QR's Wishlist?
Cheers,
Bunumuring

The investment strategy reflects different goals and priority.

EY is trying to buy its way into failing airlines in order to gain control and hopefully assemble its own IAG, LATAM, AF-KLM, or LH Group.

QR is buying into mostly quality airlines as a way to hedge its financial risks due to political and other risks.

According to another site, this caught CX off guard. Kingboard sold out because they disagreed with SWIRE on the direction of CX. QR will have one board seat. Also, CX may have to release more shares to have the required % amount available for public sale.

I honestly think this is awesome.

LAX772LR wrote:

EK413 wrote:

and was in recent talks with AA but opted to pull out.

LOL, that's cute.

But hey, I guess being essentially told to go to hell, is a reason to "opt out" of such talks.

I was quite surprised that QR wanted to invest in such a substandard airline in the first place

MileHFL400 wrote:

I was quite surprised that QR wanted to invest in such a substandard airline in the first place

You do realize that, unlike AvGeeks, investors actually focus on factors relevant to their objective... not whose seats or FAs have the firmest cushions.

AA's financials would be far from "substandard."

Geoff1947 wrote:

IslandRob wrote:

Why 9.6% Is there any significance (financial, regulatory, symbolic, etc.) to obtaining that particular share size? -ir

That’s the holding the seller had

https://asia.nikkei.com/Markets/Nikkei- ... -Kingboard

Geoff

That explains it. Thanks!

QR will be a passive investor, unlike Kingboard; probably welcome news for Swire and CA.

https://www.flightglobal.com/news/artic ... uy-442968/

RL777 wrote:

Kingboard never had any intention of keeping its shares long term, a quick turnaround investment for them. In terms of what this means I wouldn't read into very much. QR is attempting to diversify it's income as the political situation remains unclear.

Still a risky move. Far better investment opportunities out. Nothing against CX, I just think they’re face headwinds as mainland competitions grow.

MileHFL400 wrote:

LAX772LR wrote:

EK413 wrote:

and was in recent talks with AA but opted to pull out.

LOL, that's cute.

But hey, I guess being essentially told to go to hell, is a reason to "opt out" of such talks.

I was quite surprised that QR wanted to invest in such a substandard airline in the first place

I know right? BA is utter trash - why on earth would QR want to invest in them? Oh yeah because they're still printing money.

Bottom line is, Qatar has substantial gas revenues that need to either sit in a bank somewhere or (preferably) invest in tangible assets worth something. That CX stake fits the bill. Qatar Airways is the vehicle through which they prefer to make those big investments such as in British Airways and Heathrow Airport.

The Qataris have money invested globally through multiple investment vehicles.