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SYDNEY—Virgin
Blue Holdings Ltd., Australia’s second-biggest airline,
surged the most in three years in Sydney trading on
speculation its spinoff from Toll Holdings Ltd. may lead
to a takeover bid.
The
carrier, part-owned by Richard Branson’s Virgin Group
Ltd., jumped 14 percent, the most since January 2005, to
66.5 cents at the close. The stock has risen 32 percent
in the past three days.
Toll,
Australia’s largest freight hauler, said on July 14 it
would distribute a 62-percent stake in Virgin Blue to
shareholders via a special dividend. That has spurred
speculation about a bid and also caused index-racking
funds to buy the carrier’s shares in anticipation of it
joining the S&P/ASX 300.
“It
comes back to an element of takeover prospects that
weren’t there when Toll held the stake,” said Brent
Mitchell, an analyst at Shaw Stockbroking Ltd. in
Melbourne. “There could also be someone adjusting their
index funds to it.”
Virgin
Blue expects to join the S&P/ASX 300, it said on July
14.
Mitchell
said it was unlikely that Virgin, which owns about a
quarter of the carrier, would buy more shares.
“I’m
ruling out the Branson group taking a larger stake for
the moment,” he said. “They’re under pressure globally
with rising fuel prices and the general health of the
aviation industry.”
Virgin
owns stakes in carriers in Malaysia, the UK, Nigeria and
the US. (Bloomberg) |
