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 The Nikkei business daily said AirAsia, the region's most aggressive
budget airline, is in talks with financial institutions on a
possible tender offer for the low-cost carrier - sending shares in
Skymark surging 28 percent.
Skymark last month warned of uncertainty about its ability to stay
in business if it had to pay penalties to Airbus for the failing to
follow through on an order for six A380 superjumbos. The carrier,
which had been unable to get financing for the deal, said Airbus was
demanding "an extraordinary amount of compensation."
While the Nikkei report sent Skymark's shares up by their daily
limit of 50 yen, AirAsia Chief Executive Tony Fernandes was emphatic
in his denial.
"Never seen such rubbish. AirAsia has no interest in Skymark in
Japan," he wrote on Twitter. "We focused on new airline.".
AirAsia said last month it is planning a low-cost airline with
Japan's biggest online retailer, Rakuten Inc <4755.T>, and other
companies, its second attempt to tap the Japanese market.
Skymark said in a statement it has not been approached by AirAsia.
Despite the denial of interest from AirAsia, its shares remained
swamped by a glut of buy orders at 230 yen, valuing the company at
$205 million.
Skymark could be attractive to some airlines as it has 36 slots at
Tokyo's Haneda airport. But Goldman Sachs analyst Kenya Moriuchi
said in a note to clients that he saw little chance of a takeover
while Skymark was financially viable because regulations suggest
those slots are unlikely to automatically pass over to AirAsia.
"As long as there is uncertainty over how those slots would be
distributed, it's difficult to imagine that AirAsia would push
through with this," he wrote.
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Others said there was a growing concern that AirAsia is trying to do
too much at once.
"It needs to diversify outside Southeast Asia, where conditions have
become challenging and growth opportunities are no longer so huge,
but not at any cost or risk," said Brendan Sobie, chief analyst at
Centre For Aviation, an industry consultancy.
In addition to its new budget airline in Japan, AirAsia has also
just started an affiliate in India, where it faces strong and
established competitors. It is also trying to rev up growth at its
Southeast Asian affiliates in Thailand, Indonesia, and the
Philippines amid intense competition and slowing economic growth.
(Additional reporting by Aradhana Aravindan in Singapore, Al-Zaquan
Amer Hamzah in Kuala Lumpur and Chris Gallagher and Chang-Ran Kim in
Tokyo. Editing by Siva Govindasamy and Edwina Gibbs)
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