Thu, Dec 14, 2006
Consortium Sweetened Deal After Initial Offer Rejected
Press reports from the land down
under say the country's flagship carrier Qantas has accepted an
$11.1 billion (Australian) buyout bid from a consortium made
up of Allco Equity, Macquarie Bank, US buyout specialist Texas
Pacific and Canada's Onex.
The group, calling itself Airlines Partners Australia (APA),
upped its initial offer to $4.32 per share on Tuesday, which Qantas
Investment company J.P. Morgan said they expected Qantas to
accept after APA upped its offer and changed some of the sale
conditions. Reports indicate the accepted bid works out to $5.60
One sticking point on Tuesday's offer was a $79 million break-up
fee should the deal fall through. That amount was dropped an
unspecified amount on the follow-up offer.
As ANN reported, APA
first bid for Qantas on November 21, at $7.9 billion. It looks like
patience paid off.
Australian ownership rules prohibit foreign ownership or control
of any of the country's airlines. Foreign partners Texas Pacific
and Onex would own less than 40% of the airline under the bid.
Throughout negotiations, the consortium said it was commited to
maintaining Qantas' maintenance and safety record, and that it
supports management’s plans to invest in excess of $10
billion over the next five years and to purchase more than 70 new
Media reports in Australian newspapers all seemed to agree APA's
overture was never intended as hostile, and Qantas never considered
it as so.
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