CNAHC, holding 12.07 percent of China Eastern’s H-shares, is the largest negotiable H-share holder of China Eastern. In the announcement, CNAHC asked China Eastern and SIA to put forward better share participation scheme and meanwhile maintain its rights to raise suggestions that meet the benefits of shareholders better.

As Li Jiaxiang, board chairman of Air China, has been appointed as director of General Administration of Civil Aviation of China (CAAC), Citibank Group pointed out that it shows relevant authorities agree with Li’s opinion on the restructuring of China’s aviation industry.

Earlier it was reported that an anonymous letter said Li had suggested to merge Air China and China Eastern through share swap and CNAHC planned to buy the newly issued H-shares of China Eastern at 4.85 Hong Kong dollars per share.

Citibank predicted that the SIA, Temasek and China Eastern deal will not get approved at the pending shareholders’ meeting on Jan. 8, believing that the synergy effect will be larger if China Eastern alliances with Air China and Cathay Pacific in the future. Citibank Group predicted that the bidding price provided by Air China and Cathay Pacific will exceed the 3.8 Hong Kong dollars per share.

The A-share price of China Eastern closed at 21.57 yuan per share on the first trading day of 2008, up 1.32 percent from the previous trading day. The A-share price of Air China surged by 8.05 percent to close at 29.65 yuan per share. (Edited by Sun Huanjie, )