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NEWS UPDATES Asean Affairs        24  January 2011

Bank rejects airline offer

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Krung Thai Bank (KTB) has turned down a renewed offer by Thai Airways International to acquire its stake in the budget airline Nok Air as the new price is still considerably below what the bank expected. Following the latest round of negotiations on Jan 19, the state-controlled bank held its ground that 44 baht represented a reasonable value for Nok shares, while THAI proposed 30 baht each. The flag carrier's board on January 14 authorised its management to sweeten its offer to buy the 5 million shares held by KTB for 150 million baht, or 30 baht a share, up from the 13 baht THAI originally proposed.

THAI, already the largest shareholder with 39 percent of Nok Air, wants to buy the bank's holding to gain greater control of the no-frills carrier.

"There is no sign yet the gap between valuations will be bridged," an insider said. While negotiations are deadlocked for the time being, the source said both parties want to keep the door open for possible talks, though nothing has been scheduled. Nok Air has been largely independent from THAI.

THAI's new offer was a reversal of management's previous stance that it would not pursue a purchase above 13 baht a share.

It improved its offer in the face of lingering difficulties, largely opposition from the Transport Ministry to its proposed launch of a new low-cost carrier in partnership with Singapore's Tiger Airways.

Industry observers say the chance of Thai Tiger Airways, 51 percent owned by THAI and other Thai entities and 49 percent by Tiger, getting off the ground is very slim as THAI has been unable to meet the growing list of conditions demanded by the ministry.

KTB continues to see 44 baht per share as an accurate reflection of the budget airline's book value and growth potential.

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This year in Thailand-what next?

04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More

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