Virgin says Patrick may have to up bid

SYDNEY - Patrick Corp has disputed that it may have to raise its bid for Virgin Blue Holdings to comply with local law and is seeking a ruling from the country's regulators.

The discount airline said yesterday that Patrick might have to raise its January 28 offer to A$2.06 ($2.24) a share from A$1.90 to match prices paid for shares in Australia's second-largest carrier by Virgin Group.

Virgin Blue stock rose ... yesterday to close at ...

Patrick, Australia's biggest port handler, last week offered A$1.1 billion for the 54.6 per cent of the airline's stock it did not already own.

In retaliation, Richard Branson's Virgin Group increased its stake in the airline to 25.1 per cent by buying about 0.5 per cent of Virgin Blue's stock.

Virgin Blue said that under Australia's Corporations Act, takeover offers were required "to be at a price which equals or exceeds the maximum consideration that the bidder or an associate of the bidder provided or agreed to provide in the four months before the date of the bid".

A spokesman for Patrick was not immediately available but Virgin Blue said the company had sought the advice of the Takeover Panel and the Securities & Investment Commission.

Patrick, Virgin Blue's biggest shareholder, said in its bidder's statement it intended to retain the airline's senior managers and it would no longer trade on the exchange if all its shares were acquired. Patrick shares rose ... to close at ...

- BLOOMBERG