CATHAY PAC AIR (00293) announced it would repurchase Qatar Airways' entire 9.57% stake (643,076,181 shares) at HK$10.8374 per share under a deed of undertaking. The repurchase price represents a 3% discount to the five-day volume-weighted average price, with a total consideration of approximately HK$6.97 billion. Post-transaction, the public float of CATHAY PAC AIR will decrease to around 20.53%. The repurchased shares will be held as treasury stock.

CLSA maintained a "Hold" rating on the stock, viewing the announcement as a net negative. Although the buyback price reflects a 4% discount to the last closing price, there is no indication the repurchased shares will be canceled (the announcement only mentions holding them as treasury stock). However, the Hong Kong Stock Exchange's waiver of the minimum 25% public float requirement should alleviate concerns over potential future equity fundraising.