virgin blue 'extremely vulnerable' - rex

DOMESTIC airline Regional Express (Rex) says Virgin Blue is extremely vulnerable to a takeover.
Speaking to investors at the company's first half results briefing, Rex chairman Kim Hai Lim said Virgin Blue was a takeover target.

"Virgin's shareholdings have been extremely fragmented, which means that Virgin is now extremely vulnerable to a takeover bid, whether hostile or friendly," Mr Lim said.

Mr Lim said Rex had purchased a parcel of Virgin Blue shares so it could have some influence over the future of the company.

"We purchased a block of Virgin shares," he said.

"We were hoping that we could take a small strategic interest so we could have some small influence as to the future of Virgin.

"Virgin does have an impact on regional aviation and it has already entered some of our markets.

"So we felt it was in our strategic interest.

"Also we do feel there is a certain undervaluation of Virgin shares."

Rex had 19.1 million Virgin Blue shares as at December 31, equating to about 1.82 per cent of the stock.

The Singaporean investors behind Rex hold about a 55 per cent stake in the carrier are also said to be quietly building up their stake in Virgin Blue.

Budget airline Virgin Blue announced yesterday 400 jobs would be affected when it axes as many as five aircraft from its local fleet, although it was too early to say whether these would include redundancies.