Air Canada owner approached on U.S. mergers: CEO
CALGARY, Alberta (Reuters) - ACE Aviation Holdings (ACEa.TO), majority owner of Air Canada (ACa.TO), has been approached by private equity players and pension funds on ways that Air Canada could join the U.S. airline consolidation wave, ACE Chief Executive Robert Milton said on Friday.
Milton said a weak Air Canada share price has prompted ACE to consider other options for boosting value beyond its preferred plan of winding down the holding company and distributing its remaining 75 percent interest in the airline, the country's biggest.
"In my view, as I watch the U.S. airlines scurrying around to merge, anybody that actually ties up with Air Canada gets a unique piece of geography relative to the way the U.S. guys would split it up," Milton said in a conference call.
"So there has been dialogue with the U.S. space looking to change, and I don't think it's inconceivable that Air Canada could be part of it and I think it would make a lot of sense for a U.S. airline to look at Air Canada."
In recent days, it has been reported that Delta Air Lines (DAL.N) and Northwest Airlines Corp (NWA.N) could announce a merger as early as next week and that United Airlines (UAUA.O) and Continental Airlines Corp (CAL.N) are in the early stages of talks.
ACE executives have been expecting to wind up the holding company by around the middle of this year, but Milton said international pressure on airline stocks may affect that schedule.
He said he had not talked to Ottawa about proposing changes to federal legislation that limits foreign ownership in a Canadian airline to 25 percent. However, it may not be necessary for foreign private equity to get involved, he said.
"I think that there's plenty of money in Canada," Milton said.
Air Canada shares were up 6 percent at C$10.25 on the Toronto Stock Exchange on Friday morning. ACE rose 2 percent to C$22.71.
($1-$1 Canadian)
(Reporting by Jeffrey Jones; Editing by Peter Galloway)
02/08/08 10:26 ET
CALGARY, Alberta (Reuters) - ACE Aviation Holdings (ACEa.TO), majority owner of Air Canada (ACa.TO), has been approached by private equity players and pension funds on ways that Air Canada could join the U.S. airline consolidation wave, ACE Chief Executive Robert Milton said on Friday.
Milton said a weak Air Canada share price has prompted ACE to consider other options for boosting value beyond its preferred plan of winding down the holding company and distributing its remaining 75 percent interest in the airline, the country's biggest.
"In my view, as I watch the U.S. airlines scurrying around to merge, anybody that actually ties up with Air Canada gets a unique piece of geography relative to the way the U.S. guys would split it up," Milton said in a conference call.
"So there has been dialogue with the U.S. space looking to change, and I don't think it's inconceivable that Air Canada could be part of it and I think it would make a lot of sense for a U.S. airline to look at Air Canada."
In recent days, it has been reported that Delta Air Lines (DAL.N) and Northwest Airlines Corp (NWA.N) could announce a merger as early as next week and that United Airlines (UAUA.O) and Continental Airlines Corp (CAL.N) are in the early stages of talks.
ACE executives have been expecting to wind up the holding company by around the middle of this year, but Milton said international pressure on airline stocks may affect that schedule.
He said he had not talked to Ottawa about proposing changes to federal legislation that limits foreign ownership in a Canadian airline to 25 percent. However, it may not be necessary for foreign private equity to get involved, he said.
"I think that there's plenty of money in Canada," Milton said.
Air Canada shares were up 6 percent at C$10.25 on the Toronto Stock Exchange on Friday morning. ACE rose 2 percent to C$22.71.
($1-$1 Canadian)
(Reporting by Jeffrey Jones; Editing by Peter Galloway)
02/08/08 10:26 ET
