Qantas puts the pressure on APA
Business Daily reported this morning that the Qantas board has put pressure on the private equity syndicate Airline Partners Australia to expedite its $11.1 billion buyout offer.
The report says that BusinessDaily learned yesterday that a blunt message was delivered to APA by Qantas directors late last week, with it is understood APA director Bob Mansfield and his team were told to “be speedy, be clear and put, whatever you are going to put, as soon as possible.”
The message was conveyed by takeover advisers under instructions from members of the Qantas board and senior management and in addition, APA was told that running an airline was complicated enough without the continued distraction of a long and unresolved takeover bid.
A source close to the board told BusinessDaily: –
“They (APA) have been told that we’ve got an airline to run and we have got $13 billion worth of planes on order”.
“Coupled with this is the need to resolve the concerns of 37,000 employees, 20 million passengers a year and to operate planes that take off every two minutes.”
“The share base at the moment is not aligned with the long term strategy of the company.”
The source added that “either the bid progresses to a point where it is more attractive to more of the shareholders, or another mechanism has to be found to sort out our shareholding”.
There are 16 days left until APA’s $5.40 a share buyout offer expires, with the flow of shares to the joint Australian North American bid syndicate slowing to a trickle, with APA requiring a 90% shareholder acceptance for the deal to succeed with the bid being blocked by fund managers UBS Nominees and Balanced Equity Management, both wanting more and are refusing to sell their combined 14% stake in the airline.
UBS, with 10.4% of the airline, holds sufficient shares to scuttle the offer and Deutsche confirmed it had also further increased its stake to a similar deal-breaking amount of 10.66%.
APA holds just 30.6% of Qantas stocks and is counting on the 40% of Qantas shares soaked up by hedge funds.
Yesterday, neither Qantas nor APA were prepared to talk publicly about the bid’s likely outcome, an offer that Qantas chairman Margaret Jackson and her board recommended to shareholders in December, but last month Ms Jackson said she “would be devastated if it (the bid) didn’t go through as this is an outstanding opportunity for shareholders”.
Any revised offer is unlikely to emerge before Tuesday with insiders suggesting the outcome was likely to be known by Wednesday.
Qantas shares continued to rise yesterday and closed 3 higher at $5.19.
A Report by The Mole from BusinessDaily
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