Qantas Accepts Sweetened Bid Valued At US$8.7 Billion
Australia's Qantas Airways agreed to a sweetened A$11.1 billion ($8.7 billion) buyout offer led by Macquarie Bank and private equity firm Texas Pacific Group after the bidders dropped a break fee.
The offer of A$5.60 a share, 10% above Qantas's last trade, was unanimously endorsed by the Qantas board.
Qantas had just a day earlier rejected Macquarie's initial offer of A$5.50 per share saying that the conditional A$10.9 billion ($8.6 billion) buyout offer had too many conditions that the non-executive directors considered unacceptable.
The bidding team has been shaped to ensure it meets ownership caps on Australia's flag carrier which require the airline to remain majority Australian owned with no individual owning more than 25%.
The consortium includes Canadian investment firm Onex, Allco Finance Group and Allco Equity Partners.
The offer values Qantas at 15.9 times forecast earnings, compared with regional rivals Singapore Airlines at 12.9 and Cathay Pacific Airways at 17.8, according to Reuters data.
Qantas chairman Margaret Jackson and managing director Geoff Dixon, known for their close ties to the conservative coalition government, are expected to lead the effort to persuade Canberra that the deal is in the national interest.
The government has only once before blocked a takeover on national interest grounds, stopping Royal Dutch Shell buying Woodside Petroleum on fears that Shell would develop offshore projects ahead of Woodside's local gas projects.