Etihad moves up the Virgin hierarchy
Following buying earlier in the week, Etihad notified investors it had boosted its stake in Virgin to 13.4 per cent, up from 12.3 per cent. The Abu Dhabi-based airline appears eager to move up the share register as quickly as it can, with the latest increase coming just a week after its previous buying spree.
Shortly after Etihad's filing to the market on Friday, another block of 26.2 million shares - about 1 per cent of Virgin's stock on issue - changed hands for $11.8 million.
The identity of the buyer of the shares at 45¢ a piece was not immediately known but is expected to be Etihad.
The latest buying on-market means Etihad's stake is now greater than the holdings of Sir Richard's Virgin Group, whose holdings amount to 12.47 per cent.
Sir Richard sold half his stake in the airline he co-founded to Singapore Airlines in April, which made the latter Virgin's second-largest shareholder after Air New Zealand at 23 per cent.
The businessman has made clear he intends to eventually sell his remaining stake because he believes the branding agreement with the airline is far more crucial to him than an equity holding.
Etihad may need to buy a portion of Sir Richard's holdings in order to achieve its goal of 19.9 per cent.
Before he sold part of his stake to Singapore Airlines for about $122 million, Etihad had preliminary talks with Virgin Group executives about buying holdings in the airline from him.
Etihad has approval from the Foreign Investment Review Board to build a stake of as much as 19.9 per cent.
Last week, the competition regulator also said it would not oppose Air New Zealand boosting its stake in Virgin by another 3 per cent to almost 26 per cent under creep provisions.
Frequently Asked Questions about this Article…
According to the article, Etihad has boosted its stake in Virgin Australia to 13.4% (up from 12.3%), making it the airline's third-largest shareholder.
Etihad's stated goal is to build a stake of up to 19.9% in Virgin Australia. The Abu Dhabi-based airline has approval from the Foreign Investment Review Board (FIRB) to hold as much as 19.9%.
A block of 26.2 million Virgin Australia shares (about 1% of stock on issue) traded for $11.8 million at 45 cents a share. The buyer's identity was not immediately confirmed in the article but was expected to be Etihad.
Etihad's 13.4% stake is now larger than the holdings of Sir Richard Branson's Virgin Group, which amounted to 12.47% at the time of the report.
Yes. The article notes Sir Richard sold half his stake in Virgin Australia to Singapore Airlines in April, and he has signalled he intends to eventually sell his remaining stake because the branding agreement matters more to him than the equity holding.
The article says Etihad may need to buy a portion of Sir Richard Branson's remaining holdings in order to reach its 19.9% goal, implying further transactions between major shareholders are possible.
Air New Zealand is a major shareholder (reported at 23% in the article). The competition regulator said it would not oppose Air New Zealand boosting its stake by another 3% — potentially taking it to almost 26% under 'creep' provisions.
Investors should watch changes in the major share register (Etihad increasing toward 19.9%, any sales by Sir Richard, and moves by Air New Zealand), regulatory approvals such as FIRB rulings, and any on-market block trades (for example the recent 26.2m shares at 45¢). These developments can affect ownership dynamics and market sentiment.
Call 1300 880 160
Start a chat
Schedule a call
