Qantas Board meets for the first time since take over bid
The board of Qantas Airways is meeting for the first time today since they received a takeover proposal from Macquarie Bank and partners.
Qantas CEO Geoff Dixon and CFO Peter Gregg will update the Board on progress regarding the negotiations with the consortium this week and if Directors should enter formal price discussions.
Sources close to the board said some Directors were concerned about the amount of debt Qantas would carry and the pressure this would put on the airline to sell assets to meet its interest repayments.
However, Macquarie is understood to have told its syndicate of debt providers, which include Credit Suisse, Citigroup, Goldman Sachs, Calyon and Royal Bank of Scotland the base case did not call for immediate asset sales.
Macquarie and the group it represents – which also includes Allco Finance Group, Pacific Equity Partners and Canada’s Onex Corp – have yet to make a formal offer for the airline, but are reported to be considering a bid of between $5 and $5.50 a share.
Qantas shares closed at $4.95 yesterday, up 1%, and analysts said the board would be hard pressed to rebuff such a high offer, despite any concerns about debt repayments, with Qantas stock never closing above $5.28, which it reached in 1999 and was trading at less than $3 in July.
While Qantas consider the deal, Air Canada’s plans to operate on the Sydney-Los Angeles route have been given more momentum with the Canadian Government’ pledging this week to actively pursue more “open skies” agreements, with according to Canadian media reports, Australia near the top of the list of countries with which Canada wants to pursue a new agreement.
Report by The Mole
John Alwyn-Jones
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