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.

FMI: www.qantas.com