China Eastern opposes alliance offer from Air China

China Eastern has reportedly described an offer by Air China's state-owned parent company to buy a 30% stake in it as incomplete and lacking legal validity.

As per the information available, China National Aviation Corp (CNAC) said there could be a $1.9bn (£973m) cash injection for China Eastern. CNAC, parent of flag carrier Air China, also pitched a strategic alliance between Air China and China Eastern Airlines involving establishing a hub in Shanghai, integration of their cargo businesses, code sharing and cooperation in route network and capacity, frequent flyer programs, maintenance and ground handling.

The offer came 10 days after China Eastern shareholders rejected Singapore Airline's attempt to buy a 24% stake.

CNAC already owns 3.9% of China Eastern and was one of the key voices against the Singapore deal, which it said undervalued the company at 3.80 Hong Kong dollars (25 pence) a share. CNAC has offered to pay not less than five Hong Kong dollars a share.

China Eastern said China National Aviation Corp (CNAC), the parent company of Air China, had made the approach "in the form of a letter and not a formal proposal as CNAC had promised on January 7." It said: "CNAC has not provided proof that their own board has approved the proposal."