Hong Kong Aircraft Engineering Co. fell the most in two months in Hong Kong trading after Swire Pacific Ltd. scrapped a bid to buy the airplane-maintenance provider.
Swire, the biggest shareholder in Cathay Pacific Airways Ltd., said yesterday it wouldn’t extend or revise its offer after failing to get enough support from Haeco shareholders to complete a buyout. Investors owning about 15 percent of Haeco accepted Swire’s HK$105 a share offer, according to a Hong Kong stock exchange statement. That raised Swire’s stake to 76 percent, short of the 90 percent that allows for the compulsory acquisition of outstanding shares.
Swire offered a total of HK$9.4 billion ($1.2 billion) to buy outstanding shares of Haeco in a bet that rebounding global economy will stoke demand for air travel and plane repairs. Affiliate Cathay Pacific sold its 15 percent stake in the maintenance company at the offer price to help raise funds for planes and a new air-cargo terminal in Hong Kong.
Haeco declined 1.9 percent, the most since May 25, to HK$103.00. Swire closed unchanged at HK$94.35.
Swire’s offer was 25 percent higher than Haeco’s closing price on June 4, the last day of trading before the bid was announced. Swire owned 46 percent of Haeco when it made the offer.
Haeco operates facilities in Hong Kong, China, Singapore and Bahrain and has ventures with companies including Boeing Co., Honeywell International Inc. and Goodrich Corp.
The maintenance company will seek a three-month waiver from a stock-exchange rule that forces listed companies to have at least 25 percent of their shares freely traded.
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