Qantas takeover possible but difficult

Saturday, 08 Nov, 2006 0

Analysts Shaw Stockbroking Research Director Scott Marshall has said in the Age that a potential takeover of Qantas Airways Ltd by a private equity group was plausible but that foreign ownership laws would make it difficult, with the main issues for a potential takeover being shareholder limitations and foreign ownership laws applicable to Qantas stock.

Mr Marshall said, “The main one is the 49 per cent aggregate foreign ownership cap and if Qantas was to be taken over you would have to have either a change in the ownership restrictions, which is possible, but it won’t happen in the short term.”

The report went on to say that if the Federal laws weren’t changed, a new ownership structure would have to be such that no more than 49 per cent is owned by overseas investors, adding  “It’s possible but very, very difficult to make a takeover bid at the moment via a private equity consortium”.

Mr Marshall said, “The market is obliviously talking about it but I think the stock market might be racing a bit ahead of itself.”

Another analyst said, “It’s plausible and you can’t just be dismissive of it, as airlines are pretty volatile, have a really high degree of operating leverage and you’ve got some foreign ownership issues in terms of Qantas but it’s just difficult to say that you can’t do it.”

Talk that Qantas may be the focus of a potential takeover from a private equity group surfaced was spurred by an unsourced report in The Australian Financial Review, which valued Qantas at over $8 billion, with the company’s shares climbing 11 cents or 2.6 per cent to $4.31 on Tuesday.

Report by The Mole



 

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John Alwyn-Jones



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