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September 24, 2007

Air China and Cathay Pacific Get Owned, Denied Right to Bid on China Eastern

posted by MR WAVETHEORY at 9/24/2007 08:42:00 PM
If there is one lesson from what happened the Air China/Cathay Pacific's failed attempt to bid on China Eastern, it's that China is still not a free market. If it were America and Air China and Cathay Pacific had put up a rival bid for China Eastern, all of Wall Street would be up in arms if the government told them that they couldn't submit a higher bid for China Eastern. Unfortunately, we are in America. If it were America, private equity houses might have even joined in the fray to up the price of the deal. If this were Wall Street, we'd be seeing a bidding war. Alas, the government steppd in and ruined the party just when things were getting started! That is why China Eastern stock is not trading higher today in Hong Kong. In fact, it is cratering because the Chinese government told Air China and Cathay Pacific to p*ss off. That is why everyone is hurting.

Cathay Pacific Airways 21.05, -1.65, -7.3%
Air China 10.12, -1.72, -14.5%
China Eastern Airlines 7.27, -1.43, -16.4%

That's alot of red ink. Oh well. Another day, another blowup! Just another day's work!

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