RE: Next BCECan't agree with you. Merger or takeover more likely
Fri Feb 8, 3:59 PM ET
MONTREAL (AFP) - Private equity players and pension funds have approached Air Canada's parent ACE Aviation Holdings touting a possible buy of Canada's top airline, ACE chief executive Robert Milton said Friday.
However, he refused to identify the potential bidders for ACE's 75 percent stake in Air Canada, which ACE is looking to divest.
"We've now been approached by private equity, by pension funds," CEO Robert Milton said during a conference call on ACE's year-end results.
Milton noted a wave of consolidation in the US airline industry, adding, "I don't think it's inconceivable that Air Canada could be part of it."
Following his comments, Air Canada stocks gained three percent in Toronto on Friday, after climbing 18 percent the previous day on solid fourth-quarter earnings results.
In the United States, Delta Air Lines and Northwest Airlines were discussing merger, according to reports. Meanwhile, United Airlines and Continental Airlines are in early merger talks.
"In my view, as I watch the US airlines scurrying around to merge, anybody that actually ties up with Air Canada gets a unique piece of geography relative to the way the US guys would split it up," Milton said.
Canada's investment rules, however, allow a maximum of 25 percent foreign ownership in its airlines. So US airlines would need to partner with a Canadian investor to buy Air Canada.
"I think that there's plenty of money in Canada," Milton added.
Source: https://news.yahoo.com/s/afp/20080208/bs_afp/canadaairlinemergercompanyaircanada_080208204703