Thu, Nov 23, 2006
Qantas Gets Unsolicited $7.9 Billion Buyout Bid
Qantas shares soared
when the airline confirmed Macquarie Bank Ltd and Texas Pacific
Group, a private investment firm, tendered a $7.9 billion bid to
buy it out. The bid comes only a week after US Airway's Group made
an $8 billion bid for bankrupt Delta Airlines.
Qantas responded to a rumor of the bid with a terse statement on
its website saying, "The approach is confidential and incomplete
and is being investigated by Qantas." It added it had spoken to a
range of individuals and companies including other airlines over
the past several years. Calls for comment were referred to the
statement.
According to Bloomberg, Qantas has posted a profit for 13
straight years -- even though out the latest industry slump that
cost the industry $40 billion worldwide.
Qantas shares rose to a record $4.05 a share on the news before
falling back to $3.90 per share. That places the airline's value at
up 16% at market close on Wednesday.
Australian market watchers say senior players are taking seriously
rumors of a buy out bid at $4.00.
The bid drew fire from the airline's labor unions and the
country's lawmakers on worries of a company breakup.
According to CNN, the deal would leave the majority of holdings
-- and control of the airline -- with Australian owners. Macquarie
would take a 25% stake with other Aussie investors getting another
25%. Qantas senior management would take 1% leaving the
remaining 49% available to investors outside the country including
Texas Pacific.
Australian law prohibits one owner holding more than 25% of the
airline.
Qantas is Australia's largest airline. Its history dates back to
1920 flying as the Queensland and Norther Territory Aerial
Services. Currently it carries two of every three travelers
domestically, and one of three internationally in Australia.
The airline operates a mixed fleet of Boeing and Airbus
aircraft. A statement on its website says Boeing's 787 is to become
the cornerstone of its domestic and international fleet renewal
program. Currently it plans to purchase up to 115 Dreamliners. The
airline also has plans to purchase 12 of Airbus' A380 superjumbos,
but a two-year delivery delay for the aircraft may interfere with
those plans.
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