Fight over Virgin

The fight over control of Virgin Australia Holdings (ASX: VAH) is hotting up, with news emerging that Singapore Airlines and Etihad are both looking to lift their stakes in Australia’s second-largest carrier.

Singapore Airlines currently holds 10% of Virgin, while Etihad has 8.2%, and Air New Zealand (ASX: AIZ) has a 20% stake. The speculation follows Singapore Airlines confirming that it is in talks to sell all or part of its 49% stake in British airline Virgin Atlantic to US carrier, Delta, as it bids for a greater focus on the Asia-Pacific region.

Related: Airfare wars – Battle for the skies

According to a report in today’s Sydney Morning Herald (SMH), Singapore gained a 10% stake last month and is likely to raise its holding further. Singapore, Etihad and Air NZ have no seats on the board of Virgin, with the company saying that could lead to a ‘shambolic situation’. But Virgin is going to have to spend a fair amount of time managing these sizeable shareholders, because they have no board representation.

Sir Richard Branson’s Virgin Group holds a 23.5% stake in Virgin, but is unlikely to sell his stake, unless it’s at a significant premium to the current share price of 44 cents.

With Virgin Australia reshaping itself as an upmarket competitor to Qantas Airways Limited (ASX: QAN), Mr Branson is likely looking for the company to gain market share, and increasing its revenues and profits.

Virgin recently announced that it had taken a 60% stake in budget airline, Tiger Airways Australia, and a full takeover over of regional flyer Skywest Airlines (ASX: SXR), as it ramps up its assault on Qantas’s Jetstar and Qantas Link businesses.

Foolish takeaway

The tug-of-war over Virgin continues and it seems Virgin’s turbulent history is far from over. Once majority owned by Patrick Corporation and then Toll Holdings Limited (ASX: TOL), Virgin looks to be the plaything of major airlines this time.

In the market for high yielding ASX shares? Get three “Rock-Solid Dividend Stocks” in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading

Motley Fool writer/analyst Mike King doesn’t own shares in any company mentioned. The Motley Fool’s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!