U.S. News

Qantas Bid Group Will Not Make Fresh Offer


A consortium that made a failed A$11 billion (US$9 billion) bid for Australia's Qantas Airways said on Thursday it would not launch a fresh offer for the airline.

The consortium, known as Airline Partners Australia (APA), had previously said it was exploring a number of alternatives, including the possibility of a renewed offer.

"APA has concluded that in the current environment and circumstances a renewed offer on terms acceptable to APA would not be likely to succeed," the consortium said in a statement. "On that basis APA has decided not to proceed with a renewed offer for Qantas at this time."

A source familiar with the bid said the consortium -- which included Macquarie Bank and private equity firm Texas Pacific Group -- had been unwound.

The group believed any fresh bid should have been on the same economic terms as the first A$5.45 a share offer, given the challenges faced by Qantas from new competition, the source said.

However, Qantas indicated last week that it would not back a new takeover offer pitched at the same price.

"If they come back it would have to be better than A$5.45, that's for sure," Qantas Deputy Chief Executive Peter Gregg, who supported the original bid, told the Sydney Morning Herald.

The consortium admitted defeat early last week following three days of uncertainty after it failed to get 50 percent of shareholder acceptances for the bid by a Friday deadline.

Qantas senior management had supported the bid, but it was criticized as too low by key shareholders, who forced the bid group to lower the level of acceptances needed for success.

The airline has upgraded its earnings guidance three times in the past year, but faces serious competition from the launch of a rival Australian domestic service by Asian airline Tiger Airways.

The bid group also included Allco Finance Group, Allco Equity Partners and Canadian investment firm Onex.