China Eastern vote update

77% of China Eastern shareholders have voted against Singapore Airline's proposed HK$7 billion bid for a 24% stake in it. Disappointed by the results of the vote, China Eastern chairman Li Fenghua has vowed not to ally with Air China:

"We will never consider Air China as a strategic investor. The most important thing is not the price. The most important thing is to improve China Eastern Airlines' brand and management."

"There's not much difference between domestic airlines in terms of management expertise and branding. In this case, one and one would not equal more than two."

[If Air China would bid more for an equity alliance with China Eastern] "I will say 'no'. Pricing is not the only thing that matters."

[On Singapore Airlines] "I'm not prepared to see it fail. I do not think Singapore Airlines will run away."

[On a tie-up with Air China] "That will hurt the whole trend of the country's reforms and benefits to consumers. Air China's so-called proposal is contrary to anti-trust trends."

Pete Harbison, chairman of the Center for Asia Pacific Aviation, had this to say about Air China/CNAC's highly unusual action:

"The SIA deal had the backing of the government, so this really is a domestic action ... by a rival wanting to take over another,"

"[A battle] may have happened behind closed doors, but we wouldn't have known about it. I think Air China realized that if it wanted to convince shareholders then would need to do so publicly."

Related links
Reuters: China Eastern says won't consider Air China tie
Financial Times: Chinese activism
AP: China Eastern-Singapore Tie-Up Rejected
Xinhua: Singapore Airlines disappointed over rejection by China Eastern's shareholders