AirAsia denies report it weighing a bid for Japan's Skymark

Tue Aug 19, 2014 2:09am EDT
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By Anshuman Daga

SINGAPORE (Reuters) - Malaysia's AirAsia Bhd (AIRA.KL: Quote) dismissed a media report that it is weighing a bid for Japan's embattled Skymark Airlines Inc 9204.T, saying it is focused on a budget airline it is setting up with Japanese partners.

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 (AIR.PA: Quote) 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: Quote), 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.   Continued...

A Skymark Airlines Inc's airplane is parked at Haneda airport in Tokyo August 4, 2014. REUTERS/Yuya Shino