Reuters: Hot Stocks: UPDATE 1-Singapore Airlines lifts stake in Virgin Australia to 19.9 pct

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UPDATE 1-Singapore Airlines lifts stake in Virgin Australia to 19.9 pct Apr 24th 2013, 01:59 Tue Apr 23, 2013 9:59pm EDT * Singapore increases Virgin stake to 19.9 pct * Says no plans to lift holding further * Follows Virgin's purchase of 60 pct stake in Tiger (Updates with more detail, comment) SYDNEY, April 24 (Reuters) - Singapore Airlines Ltd has increased its stake in Virgin Australia Holdings Ltd to 19.9 percent, boosting its influence at the carrier at a time of industry jostling to secure lucrative routes in Southeast Asia. Australia's airline industry has been a battleground for global airlines seeking partnerships in recent months, with Qantas Airways Ltd establishing a wide-ranging alliance with Emirates Airlines. Singapore Airlines bought an additional 9.9 percent for A$123 million ($126 million) from Richard Branson's Virgin Group, becoming the biggest shareholder in Australia's No.2 carrier. The deal, which is subject to approval from Australia's Foreign Investment Review Board, takes Singapore Airlines' holding to the maximum limit allowed before a full takeover must be launched. A spokesman for the company said it had no plans at this point to further increase its holding. "While it is currently unclear whether Branson is looking for a complete sell down, the transaction moves more of the voting power into the hands of the strategic operating partners," Macquarie Equities analysts said in a note. "At this point there is no talk of a takeover from any of the parties, however, the interest from the partners does confirm the strength of Virgin Australia's virtual international network going forward, as it attempts to compete effectively with Qantas's new reach given the Emirates deal," they added. Singapore Airlines has been keen to establish a stronghold in Australia to secure passenger feed on to its long-haul services. It has added more double decker Airbus A380s and increased frequencies in the Australian market, hoping to capture passengers disenchanted with Qantas' switch from Singapore to Dubai as its new transit hub. The move comes a day after Virgin received competition regulator approval to buy a controlling stake in Tiger Australia from Singapore Airlines' budget associate, Tiger Airways Holdings Ltd. The deal, which must also be approved by the FIRB, marks a return an effective duopoly of Qantas and Virgin by removing Tiger as an independent third player. Singapore Airlines, which first bought a 10 percent stake in Virgin in late 2012, is paying A$0.48 per share, a 5.5 percent premium to Virgin Australia's last traded price. The stock was up 2.2 percent in morning trade at A$0.47. ($1 = 0.9748 Australian dollars) (Reporting by Lincoln Feast and Jane Wardell in Sydney. Additional reporting by Anshuman Daga in Singapore.; Editing by Edwina Gibbs) Link this Share this Digg this Email Reprints

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