Consortium admits defeat over Qantas bid
The dramatic takeover attempt for iconic Australian airline Qantas collapsed today after the private equity firm bidding for the group admitted defeat.
Airline Partners Australia (APA) said it would not pursue a legal loophole that may have allowed it to revive the deal in order to avoid a drawn-out legal battle.
APA, which bid AUD$10.8 bn (€6.6bn) for Qantas, failed to win acceptances from 50% of shareholders by a deadline on Friday, despite gaining recommendation from the company’s board.
Shares in the airline plummeted 3% on the Australian stock exchange on the news as investors dumped the stock following a chaotic weekend surrounding the buyout attempt.
APA, which consists of Australia’s Macquarie Bank and US private equity group Texas Pacific Group, had secured 46% of shareholders support by the deadline on Friday, but it needed 50% to gain a two-week extension to try to garner the 70% of approvals required to secure the deal.
APA said over the weekend it could claim it reached the threshold under a clause in its offer document that required shareholders who agreed to sell some of their shares to sell all of them.
It appealed for an extension after the deadline on Friday as it said a shareholder had agreed to sell enough shares to get the bid across the line, but its appeal was rejected by the Australian regulator, the Takeovers Panel.
On Monday APA said it was looking into the matter, but in a statement today the group said: “Given the amount of time it would take the issue to be litigated and the consequent uncertainty for both Qantas and its shareholders, APA has decided not to pursue arguments that it did achieve voting power in excess of 50% by the offer deadline.
“It has determined that its bid should be treated as having lapsed on May 4.”
The group added that it may launch another offer for the airline. According to Australian takeover rules there is no cooling off period for a failed suitor, which means APA could make another offer once it has had a chance to assess the situation.
Qantas chairman Margaret Jackson, said that APA’s bid had failed and the board and management would move forward.
“The board will meet again today and will also be meeting in the near future to discuss management’s three-year plan and strategies for growth,” she said.
