Qantas takeover blocked by mergers panel

SYDNEY – Australia’s mergers panel on Sunday rejected a private equity consortium’s last-ditch attempt to revive a chaotic A$11,1 billion (US$9,2 billion) bid for national carrier Qantas.

The Airline Partners Australia (APA) bid initially collapsed late on Friday after it failed to garner more than 50 per cent of shareholder acceptances by a 7:00 pm deadline. But a revival of the bid looked possible after a major American investor decided to partially back the deal, pushing acceptances to 50,6 per cent, just hours after the deadline had passed.Those hopes were dashed yesterday after the Takeovers Panel refused an appeal to count the late acceptances, effectively scuttling the consortium’s chances of getting the bid off the ground.”The panel has decided not to commence proceedings in relation to APA’s application,” it said in a statement.The bidding consortium, which is led by Macquarie Bank and includes Australian and foreign partners, immediately said it would challenge the ruling by asking for an urgent review of the panel’s decision.”APA notes that a majority of Qantas shareholders (around 60 per cent by number) representing more than 50 per cent of Qantas shares have indicated their support for the offer,” it said.The director of the Takeovers Panel, Nigel Morris, said the body would appoint another group of members to consider the second appeal.Asked whether the decision on Qantas was final, Morris said: “Yes and no.””The sitting panel which received the application has said that it would not proceed with the application,” he told AFP.”(But) APA has said it will be seeking a review.”News of the panel’s decision was welcomed by shareholders, unions and pilots.”Had the panel allowed this takeover to go ahead, Australian securities markets would have looked weak and perhaps even laughable in the eyes international markets,” deputy chairman of the Australian Shareholders Association, Steven Mathews, told the ABC.Peter Somerville, head of the Pilots Association, said the APA deal had been “simply about money” and jeopardised Qantas’ high professional standards.”We’ve been concerned that Airline Partners with their truck load of debt was always going to bring into question those professional standards,” he said.Analysts had earlier said it was unrealistic for the consortium to be allowed to count the late acceptances after the final deadline had closed.But they acknowledged that some hedge funds may have misjudged the situation by presuming the deal, believed to be the largest ever private equity bid for an airline, would reach the 50 per cent mark without their acceptances.If APA had gained 50 per cent of shareholder acceptances, it would have triggered a two-week extension of the 5,45-dollar share offer to allow the group to reach the minimum 70 per cent it needed to succeed.Debate has also centred on whether the consortium’s offer – which had been rejected by at least one key stakeholder as significantly below an acceptable price – was too low given gains in airline stocks and the sharemarket in general since the offer was first made in December.Nampa-AFPBut a revival of the bid looked possible after a major American investor decided to partially back the deal, pushing acceptances to 50,6 per cent, just hours after the deadline had passed.Those hopes were dashed yesterday after the Takeovers Panel refused an appeal to count the late acceptances, effectively scuttling the consortium’s chances of getting the bid off the ground.”The panel has decided not to commence proceedings in relation to APA’s application,” it said in a statement.The bidding consortium, which is led by Macquarie Bank and includes Australian and foreign partners, immediately said it would challenge the ruling by asking for an urgent review of the panel’s decision.”APA notes that a majority of Qantas shareholders (around 60 per cent by number) representing more than 50 per cent of Qantas shares have indicated their support for the offer,” it said.The director of the Takeovers Panel, Nigel Morris, said the body would appoint another group of members to consider the second appeal.Asked whether the decision on Qantas was final, Morris said: “Yes and no.””The sitting panel which received the application has said that it would not proceed with the application,” he told AFP.”(But) APA has said it will be seeking a review.”News of the panel’s decision was welcomed by shareholders, unions and pilots.”Had the panel allowed this takeover to go ahead, Australian securities markets would have looked weak and perhaps even laughable in the eyes international markets,” deputy chairman of the Australian Shareholders Association, Steven Mathews, told the ABC.Peter Somerville, head of the Pilots Association, said the APA deal had been “simply about money” and jeopardised Qantas’ high professional standards.”We’ve been concerned that Airline Partners with their truck load of debt was always going to bring into question those professional standards,” he said.Analysts had earlier said it was unrealistic for the consortium to be allowed to count the late acceptances after the final deadline had closed.But they acknowledged that some hedge funds may have misjudged the situation by presuming the deal, believed to be the largest ever private equity bid for an airline, would reach the 50 per cent mark without their acceptances.If APA had gained 50 per cent of shareholder acceptances, it would have triggered a two-week extension of the 5,45-dollar share offer to allow the group to reach the minimum 70 per cent it needed to succeed.Debate has also centred on whether the consortium’s offer – which had been rejected by at least one key stakeholder as significantly below an acceptable price – was too low given gains in airline stocks and the sharemarket in general since the offer was first made in December.Nampa-AFP