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Texas Pacific, Macquarie Declares Qantas Offer as Lapsed

The buyout group bidding for Australia's Qantas Airways declared its A$11 billion (US$9 billion) offer dead on Tuesday after deciding not to pursue a legal case over shareholder acceptances.

The group, which includes Macquarie Bank and private equity firm Texas Pacific Group, said it would still consider making a new bid and other alternatives after the world's largest airline takeover collapsed over the weekend.

Qantas shares dropped over 3% when trade resumed on Tuesday.

Qantas passenger jets parked at their terminal at Sydney Airport.
Mark Baker
Qantas passenger jets parked at their terminal at Sydney Airport.

The bid group, Airlines Partners Australia (APA), said it had decided not to pursue a legal argument over a clause in its offer it claimed gave it the 50% of shareholder acceptances needed by last Friday's deadline to extend the deal.

APA said this was due to the amount of time it would take for litigation and the uncertainty for Qantas shareholders.

"APA believes that Qantas shareholders need more certainty and, accordingly, it has determined that its bid should be treated as having lapsed on May 4, 2007," the bid group, Airline Partners Australia (APA), said in a statement e-mailed to Reuters.

Unions, local media and analysts have attacked the bid saga as a farce after the offer was declared dead and then later revived several times over the weekend.

APA fell short of the 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.

APA said on Monday it may launch a fresh offer but later said it may take legal action over the clause in its offer it claimed allowed it to count all the holdings of investors who agreed to tender some of their shares.

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