Funds approach ACE over U.S. airline consolidation

[Snowgoose]

I thought Milton was out of the picture? Anyway, interesting

http://www.cbc.ca/money/story/2008/02/0 ... ml?ref=rss

The head of Air Canada's parent company said Friday that it has been talking with private equity and pension funds about ways the airline could get involved in the consolidating U.S. market.

"We've now been approached by private equity, by pension funds, and I have to tell you that 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," ACE Aviation Holdings Inc. CEO Robert Milton said during a conference call following the release of ACE's fourth-quarter and year-end results.

"There has been dialogue with the U.S. space," Milton said.

"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," he added.

Milton did not go into any details or name the funds that have approached ACE, which was created as part of Air Canada's 2004 restructuring. ACE currently owns 75 per cent of Air Canada.

The comments sent shares of Air Canada higher in afternoon trading on the TSX. The company's Class B shares, which can only be owned by Canadians, rose 9.9 per cent, or 90 cents, to $10. The Class A shares, which can be owned by foreigners, gained 36 cents, or 3.7 per cent, to hit $10.02.

The comments came as some airlines in the United States have been weighing possible mergers. Delta and Northwest are said to be nearing a deal to join while United and Continental are reported to be in early-stage negotiations.

Current Canadian laws prevent a foreign owner from holding more than a 25 per cent stake in Air Canada. However, a group of investors, which could include U.S. partners or a U.S. airline, could acquire Air Canada.

Milton said Friday he believes there is enough investor money in Canada for a deal to happen.

[Four1oh]

why the hell would Milton say something like that unless he was seriously trying to peddle the airline away?

[Brick Head]

Because he is peddling the airline away.

Milton is just pumping the stock. ACE is unloading AC and vaporizing sometime this spring remember. They have kept their cards close as to how, but none the less they keep stating their time line has not changed.

Between the Q4 results and this, the stock is up. Just like he wants.

Just as ACE is about to unload. Imagine that.

I mean imagine the hurdles. Yes a Canadian could by AC. However he or she could not buy a US carrier. The reverse is also true. Dual citizenship wouldn't work. The US doesn't recognize it. Many many laws will have to change before a cross boarder merger takes place. Not saying it will never happen. Just that it is not on the horizon at the moment.

[Jaques Strappe]

Brick Head is right on the money. Nothing more than stock manipulation by Milton. Amazing how anyone who bought AC stock the day before Milton's statement stood to make quite a generous return.

The only thing that really concerns me quite frankly is another deal with the devil like CAIL had with American Airlines. American sucked CAIL dry and used them as nothing but a vehicle to pump money south into American's bottom line.