Qantas bid hits air pocket as regulator refuses extension
Australia’s takeover regulator has scuttled an A$11 billion ($9 billion) bid for Qantas Airways after refusing on Sunday to allow late support from a major shareholder who missed a deadline to accept the offer.
By Agencies |
SYDNEY: Australia’s takeover regulator has scuttled an A$11 billion ($9 billion) bid for Qantas Airways after refusing on Sunday to allow late support from a major shareholder who missed a deadline to accept the offer.
Analysts said the world’s largest airline buyout was effectively dead after the takeovers panel rejected an appeal from the bid group to include the late acceptance and so allow the offer to proceed. However, the bid group, which includes Macquarie Bank and private equity firm Texas Pacific Group, said it would appeal the decision.
“The offer is dead in its current form. Whether they come back or not and are prepared to dedicate those resources to another bid is uncertain,” Shaw Stockbroking analyst Brent Mitchell said. The bid group, Airline Partners Australia (APA), failed to reach the 50% of shareholder acceptances it needed to trigger a two-week extension of the offer by a Friday deadline.
But APA said on Saturday a late acceptance from a major US investor hours after the deadline had pushed the acceptances to 50.6% and asked the takeovers panel to review the case. The panel said Sunday it had rejected APA’s application. “The panel does not accept that Qantas shareholders have not had a reasonable opportunity to participate in the offer,” it said in a statement.
“Shareholders were well aware of the deadlines and the implications of not accepting by the deadlines.” APA, said in a statement it was seeking an “urgent review” of the decision. The takeovers panel said it was appointing a sitting panel to consider the review application. APA declined to identify the US shareholder but local newspaper reports named US billionaire Samuel Heyman.
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The sale of the national icon, dubbed the Flying Kangaroo, has faced political and strong union opposition, but was backed by the Australian government as well as Qantas management. However, some key shareholders attacked the A$5.45 per share offer as too low, forcing APA to reduce the level of shareholder acceptances needed for the deal to 70% from 90%. Qantas shares, which closed at A$5.38 on Friday, were expected to fall when they resume trading on Monday.“Qantas shares have gained quite a bit in recent weeks on a lot of speculative trading. So if the bid fails, the share price would very likely fall to about A$5 when trading resumes,” said BBY analyst Fabian Babich. Shaw’s Mitchell said the role of senior Qantas management who supported the deal, particularly chairman Margaret Jackson, was also in doubt.
“It is hard to see her staying and her position is untenable,” Mitchell said. The bid group also includes Allco Equity Partners, Allco Finance Group and Canadian investment firm Onex Qantas Airways said Sunday it considers that a A$10.8 billion ($8.9 billion) takeover bid for the airline has failed, after regulators refused to step in and save it.
The bidders, a private equity-backed group named Airline Partners Australia, refused to accept defeat, saying it would seek to appeal the regulators’ decision. But it appeared to be the last straw for the troubled, five-month-old bid for the company known as the Flying Kangaroo, and could spell fresh trauma for the airline including pressure on senior management to quit for backing the deal.
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