Shares in China Southern Airlines climbed to a 15-month high after the carrier said it was in talks with American Airlines regarding a possible stake sale.
China Southern, the biggest airline in Asia by passengers carried, said in a statement to the Hong Kong Exchange it was “in the negotiation of a possible strategic cooperation” with AA that could take the form of a share sale and other business cooperation.
The company has been in a trading halt since last Wednesday when it was reported by Bloomberg that China Southern was in advanced talks to sell a $200m stake to AA. China Southern has a market capitalisation of $10bn, half that of Texas-based AA.
Shares resumed trading today and were up 2.9 per cent to $HK5.61, compared to a 0.2 per cent decline for the Hang Seng benchmark. Shares had been up as much as 5.3 per cent.
There would be sense to a deal in which the airlines created a common network, writes Lex.