Qantas Board to discuss takeover bid today
The Qantas Board is reportedly meeting today to discuss the $11 billion takeover plan led by Macquarie Bank and Texas Pacific to privatise the carrier with the team led by Macquarie Bank’s Head of Corporate Acquisitions and Finance, Tim Bishop, reportedly working out the final details on the proposed offer from the consortium.
It is reported that Qantas management were eagerly were awaiting the bid to be delivered last night and the airline could announce details to its shareholders as soon as today after the Board meeting.
Qantas shares fell 3c to $5.23 yesterday as Mr Bishop failed to return calls from media and Executive Chairman of Allco Finance, David Coe also declining to comment on the deal, with Allco Finance expected to be the legally necessary Australian shareholder and Macquarie Bank and possibly Pacific Equity Partners holding smaller stakes.
The consortium has reassured staff that there is no intention of slashing jobs and costs and it is rumoured that Macquarie Bank and Texas Pacific will fund the deal by selling bonds secured on Qantas’s fleet of aircraft, but some analysts say that Qantas’ ageing fleet of 747s and 767s could limit the amount of money raised and also concerns that Qantas’s practice of valuing aircraft on its books at more than market value could be an issue. Macquarie Equities issued a note earlier estimating a book value some $3 billion above the market value for Qantas’ fleet.
It is reported that Texas Pacific Partner and aviation expert Rick Schifter has been deeply involved in the negotiations with Qantas’s advisers, UBS and Carnegie Wylie, with Mr Schifter resigning from his directorship at US Airways last month as speculation mounted that he had a new airline project. US Air CEO Doug Parker said in a press release in his resignation, Rick explained that the ever-increasing demands on his time at Texas Pacific and its various portfolio companies made it appropriate that he step down from the board at this time.
Texas Pacific and Macquarie have declined making any public comment since the news of the potential bid was confirmed by Qantas three weeks ago, except that the deal is dependent on Qantas board approval, that the airline will remain majority Australian owned and that the foreign consortium members, Texas Pacific and Onex will not own more than 25% each and Macquarie declaring the limit of its ownership to less than 15$ because of its interest in Sydney Airport.
Macquarie stands to make an estimated $500 million in fees from the transaction.
Report by The Mole
John Alwyn-Jones
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