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Shareholder Acceptances for Qantas Bid Decline

Shareholder acceptances of a A$11 billion (US$9 billion) takeover bid for Australia's Qantas Airways fell slightly to 28.9% after some institutional investors sold their shares, the bidding group said on Wednesday.

The bid consortium, including Macquarie Bank and Texas Pacific Group, said in a statement overall acceptances were 28.86% from 30.06% previously.

Shares held under an institutional acceptance facility, which allows institutions to withdraw their acceptances, had declined to 16.71% from 18.39% at the last update.

The consortium, Airline Partners Australia, said in a statement the decrease reflected local and offshore institutions selling their shares on market at a discount to the offer price.

One source familiar with the situation said longer-term U.S. institutions were selling while the Australian dollar was near record highs, while short-term hedge funds were increasing their stakes.

The stake held by UBS Nominees and its related interests has risen to 11.4% from 10.4%, according to a substantial shareholding notice to the Australian Stock Exchange on Wednesday. Local media have said that UBS unit UBS Global Asset Management, opposes the offer.

APA eased its offer conditions for Qantas last week to overcome some shareholder resistance. It now needs 70% of shareholder acceptances instead of 90% previously.

The A$5.45 a share offer is the world's largest airline takeover. The bid group also includes Allco Equity Partners,Allco Finance Group and Canadian investment firm Onex.