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Qantas Accepts $8.64B Takeover Offer
Qantas Accepts $8.64 Billion Takeover Offer From Private Equity Consortium
The Associated Press
SYDNEY, Australia - Qantas Airways said Thursday it had accepted an $8.64 billion (Australian dollars $11.1 billion) takeover offer from a private equity consortium including Australia's Macquarie Bank and the Texas Pacific Group.
Qantas Chairman Margaret Jackson said the board had unanimously agreed to recommend to shareholders that they accept the offer of 5.60 Australian dollars ($4.40) a share from the consortium.
The announcement follows Qantas rejection on Wednesday of the consortium's offer of 5.50 Australian dollars a share.
Jackson said in a statement the new offer included the removal of unacceptable conditions, including a break fee payable to the consortium if the deal fell through because of government regulations or a lack of shareholder support.
"It is a very momentous and exciting day for Qantas," Jackson said at a news conference later.
She said the bid price was 33 percent higher than Qantas shares were trading at before takeover speculation began in early November.
"The directors believe this offer allows Qantas shareholders to realize significant value for their shares that has not been fully recognized in the public market," she said.
The board's recommendation is subject to an opinion from an independent expert that the offer is fair and reasonable. Another condition is that 90 percent of Qantas shareholders must approve the deal, Qantas said.
Jackson said that under the deal, Qantas would remain Australian-owned.
Bob Mansfield, the director of the consortium, called Airline Partners Australia, said it supported Qantas' existing management and its plans for large capital expenditure.
"Qantas would retain the current Australian management and their growth strategy, a strategy that does not involve a break up of the airline, cuts to regional services or the movement of maintenance operations offshore," Mansfield said.
The Australian Stock Exchange had earlier suspended Qantas trading, at the request of the company. Qantas stock plunged 2.68 percent Wednesday to 5.09 Australian dollars on the rejection of the offer.
The consortium also includes Canada's Onex Corp. and Australia's Allco Finance Group and Allco Equity Partners Ltd.
The Australian government has said it will not block a takeover of Qantas so long as the deal meets the country's foreign-ownership and shareholder caps, set as part of the 1995 privatization of the Sydney-based airline.
The limits set foreign-ownership of Qantas at 49 percent, with each foreign individual allowed to hold a maximum 25 percent of shares. The bidding consortium said it plans to stay within those restrictions, with Onex and Texas Pacific Group together holding less than 40 percent.
The 86-year-old Qantas has suffered in recent years from soaring oil prices, but remains one of the few profitable global carriers amid stiff competition and widespread fear among travelers of terrorist attacks and health risks such as SARS and bird flu.
Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © 2006 ABC News Internet Ventures
Qantas Accepts $8.64 Billion Takeover Offer From Private Equity Consortium
The Associated Press
SYDNEY, Australia - Qantas Airways said Thursday it had accepted an $8.64 billion (Australian dollars $11.1 billion) takeover offer from a private equity consortium including Australia's Macquarie Bank and the Texas Pacific Group.
Qantas Chairman Margaret Jackson said the board had unanimously agreed to recommend to shareholders that they accept the offer of 5.60 Australian dollars ($4.40) a share from the consortium.
The announcement follows Qantas rejection on Wednesday of the consortium's offer of 5.50 Australian dollars a share.
Jackson said in a statement the new offer included the removal of unacceptable conditions, including a break fee payable to the consortium if the deal fell through because of government regulations or a lack of shareholder support.
"It is a very momentous and exciting day for Qantas," Jackson said at a news conference later.
She said the bid price was 33 percent higher than Qantas shares were trading at before takeover speculation began in early November.
"The directors believe this offer allows Qantas shareholders to realize significant value for their shares that has not been fully recognized in the public market," she said.
The board's recommendation is subject to an opinion from an independent expert that the offer is fair and reasonable. Another condition is that 90 percent of Qantas shareholders must approve the deal, Qantas said.
Jackson said that under the deal, Qantas would remain Australian-owned.
Bob Mansfield, the director of the consortium, called Airline Partners Australia, said it supported Qantas' existing management and its plans for large capital expenditure.
"Qantas would retain the current Australian management and their growth strategy, a strategy that does not involve a break up of the airline, cuts to regional services or the movement of maintenance operations offshore," Mansfield said.
The Australian Stock Exchange had earlier suspended Qantas trading, at the request of the company. Qantas stock plunged 2.68 percent Wednesday to 5.09 Australian dollars on the rejection of the offer.
The consortium also includes Canada's Onex Corp. and Australia's Allco Finance Group and Allco Equity Partners Ltd.
The Australian government has said it will not block a takeover of Qantas so long as the deal meets the country's foreign-ownership and shareholder caps, set as part of the 1995 privatization of the Sydney-based airline.
The limits set foreign-ownership of Qantas at 49 percent, with each foreign individual allowed to hold a maximum 25 percent of shares. The bidding consortium said it plans to stay within those restrictions, with Onex and Texas Pacific Group together holding less than 40 percent.
The 86-year-old Qantas has suffered in recent years from soaring oil prices, but remains one of the few profitable global carriers amid stiff competition and widespread fear among travelers of terrorist attacks and health risks such as SARS and bird flu.
Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Copyright © 2006 ABC News Internet Ventures
