Texas Pacific, Macquarie May Launch New Bid for Qantas
The buyout group bidding for Australia's Qantas Airways said on Monday it was considering launching a new offer for the airline following the dramatic collapse of its A$11 billion ($9 billion) bid.
The group, which includes Macquarie Bank and private equity firm Texas Pacific Group, said it was exploring alternatives, including a fresh A$5.45 a share offer, after an apparent blunder sank the world's largest airline takeover.
The group, Airline Partners Australia (APA), initially had failed to reach 50% of shareholder acceptances needed to keep the offer alive by Friday's deadline. A late acceptance from a U.S. shareholder brought it up to 50.6%, but Australian regulators refused to allow the late support, effectively killing the bid.
"Qantas farce: heads will roll," the front-page headline of the Sydney Morning Herald newspaper read Monday after the airline declared the buy-out dead late Sunday.
Hedge funds, which had swooped in to buy Qantas stock in the hope of turning a quick profit, had been betting on acceptances getting over the 50% line and it appeared the collapse of the offer had been a mistake, analysts said.
It was another twist in the sale of the national icon which has been strongly opposed by unions and some politicians but eventually won support from the Australian government and Qantas management.
"APA is exploring a number of alternatives including the possibility of making a renewed offer for Qantas at A$5.45 per share," the bid group it said in a statement Monday.
The previous offer was also valued at A$5.45 per share.
Analysts did not expect APA to make another bid for Qantas for three to six months and said it was highly unlikely a third party would get involved.
"For anybody else to come in having witnessed the debacle that has gone on in the last few months and the cost involved would be fairly hesitant before they stepped up to the plate," said Peter Harbison, managing director of the Centre for Asia Pacific Aviation.
Australia's Takeover Panel told Reuters Monday there were no specific rules related to a cooling-off period in between bids.
"There are no specific provisions in the Corporations Act which relates to follow-on bids," Nigel Morris, director of Takeovers Panel said, but would not comment specifically on Qantas' position.
However, even if APA made another bid analysts said it could be overturned by the Australian government ahead of a national election later this year if there was enough opposition to a buyout.
Australian Treasurer Peter Costello said any new bid would need to go back to Australia's Foreign Investment Review Board for approval. "If a new bid is lodged, that will of course have to be dealt with through the Foreign Investment Review Board. It depends of course on what the terms are," Costello told reporters.
Analysts said the role of senior Qantas management who supported the deal, particularly Chairman Margaret Jackson, was also in doubt.
Key shareholders had criticized the offer as too low, forcing APA to reduce the level of shareholder acceptances needed for the deal to 70% from 90%.
The bid group also includes Allco Finance Group, Allco Equity Partners and Canadian investment firm Onex.