The West

Funds build stakes in Skywest

Two fund managers have built up sizeable stakes in Skywest Airlines since Virgin Australia Holdings made a $99 million friendly takeover offer for the regional operator.

Disclosures to the Australian Securities Exchange and London's Alternative Investment Market have revealed MMCAP International and Centaurus Capital progressively raised their respective holdings in Skywest this month to about 9 per cent and 8 per cent.

Virgin Australia announced in late October it would offer 45� a share for Skywest in cash and new Virgin shares. The two funds' most recent shares purchases have been at the 42� mark.

Previously little traded on the ASX, volumes for Skywest stock have skyrocketed since the takeover bid became known.

Virgin Australia declined to comment on whether the funds' growing presence might place it under pressure to raise its offer.

Already approved by the takeovers authority in Singapore - where Skywest is incorporated - the deal must be sanctioned by Singapore's High Court and Australia's competition and foreign ownership watchdogs.

The Australian Competition and Consumer Commission is scheduled to make its ruling by the end of next month.

Virgin Australia is 24 per cent owned by Sir Richard Branson's Virgin Group. Air New Zealand has a 19 per cent stake, while Singapore Airlines and Etihad respectively own 10 per cent and 9 per cent.

At the time of its Skywest bid, Virgin Australia also made a $35 million offer for 60 per cent of discount airline Tiger Airways Australia.

Skywest shares closed unchanged yesterday at 42¢. Virgin Australia finished up 0.5¢ at 42¢.

The West Australian

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