QANTAS being taken over by Macquarie Bank..

[NM]

Qantas unions met yesterday with the private equity investors seeking to buy the airline for $11.1 billion to put their case for binding commitments to protect jobs and working conditions if the acquisition is successful...

Now that would be an interesting meeting in which to be a fly on the wall :shock: .

 

[simongr]

Also reflects a potentially changing mood and acceptance of the inevitable by the unions?

 

[serfty]

I personally do not feel it is inevitable; the Federal Government has the ability to step in and block it if they see fit to do so.

Public opinion is important and with an Election due within the next 12 months (max 360 days from the date of this post) I am sure careful consideration of this take over will occur ...

 

[JohnK]

In my humble opinion I think it would be beneficial for all involved that APA is allowed to takeover Qantas as that is realistically the only way for Qantas to survive.

I have started saving money and would be very interested in the refloat of the new look Qantas in 5-10 years time at $0.20cents/share.

 

[Kiwi Flyer]

In my humble opinion I think it would be beneficial for all involved that APA is allowed to takeover Qantas as that is realistically the only way for Qantas to survive.

I have started saving money and would be very interested in the refloat of the new look Qantas in 5-10 years time at $0.20cents/share.

So, are you shorting QF shares?

 

[Yada Yada]

I have started saving money and would be very interested in the refloat of the new look Qantas in 5-10 years time at $0.20cents/share.

So you're prepared to pay a premium for QF shares? :shock: :mrgreen:

 

[JohnK]

So you're prepared to pay a premium for QF shares? :shock: :mrgreen:

Absolutely! I want to be in on the ground floor of a new generation airline that has no assets and is riddled with debt. My accountant has assured me that these are the types of companies to invest all my hard earned money.

 

[Takeshi]

I still would like to have a wager that this deal will be blocked.
I have read more bad things about it than good things.

 

[serfty]

So, are you shorting QF shares?

Me no think so; I don;t think many in the industry would be interested in a 5-10 Year "shorting" of Qantas.

 

[serfty]

So you're prepared to pay a premium for QF shares? :shock: :mrgreen:

If you really want something you have to pay over the odds to get it.

That's how it goes now and in 2017 it won't be much different.

 

[bravoecho1]

Just for interests sake, there has been large selling by "vanilla" fund managers who are happy to lock in a profit and look at other investment opportunities and large buying by the hedge funds who are betting that the deal will go through and there is easy money on the table.

As to who is correct, time will tell.

 

[Yada Yada]

Just for interests sake, there has been large selling by "vanilla" fund managers who are happy to lock in a profit and look at other investment opportunities and large buying by the hedge funds who are betting that the deal will go through and there is easy money on the table.

As to who is correct, time will tell.

I saw some comments in one of the papers over the last few days that indicated the PM is "comfortable" with the takeover, pending seeing the detailed plan, so my feeling is that this is now home and hosed.

 

[codash1099]

I saw some comments in one of the papers over the last few days that indicated the PM is "comfortable" with the takeover, pending seeing the detailed plan, so my feeling is that this is now home and hosed.

PM says Qantas sale conditions possible
Friday January 26, 2007, 10:30 am


Prime Minister John Howard says conditions may need to be imposed on the proposed sale of Qantas.

The Airline Partners Australia consortium has proposed an $11 billion buyout of the airline. It will have to meet a series of foreign ownership and other regulatory obligations for the deal to go ahead.

Mr Howard has told Southern Cross Radio that conditions about the headquarters of the company, staff and operations may be necessary.

"Until we get the formal proposal and I'm not aware that it's been submitted, it's a bit too early to be talking in greater detail," he said.



(Sound like they are really going to play it tough)

 

[Yada Yada]

PM says Qantas sale conditions possible
Friday January 26, 2007, 10:30 am

Prime Minister John Howard says conditions may need to be imposed on the proposed sale of Qantas.

The Airline Partners Australia consortium has proposed an $11 billion buyout of the airline. It will have to meet a series of foreign ownership and other regulatory obligations for the deal to go ahead.

Mr Howard has told Southern Cross Radio that conditions about the headquarters of the company, staff and operations may be necessary.

"Until we get the formal proposal and I'm not aware that it's been submitted, it's a bit too early to be talking in greater detail," he said.

(Sound like they are really going to play it tough)

Yep, that's the article I read.

I agree with you... based on past form, once the govt starts making informal comments such as this, you know their mind is made up. Only a major public backlash could stop it now as happened with the sale of the Snowy scheme but I doubt this will happen, and I'd expect a fairly quick approval by the govt to ensure it does not impact on the federal election later in the year.

 

[Takeshi]

You are forgetting one small detail, The Unions.
Yep seems that all Qantas staff are worried about hhis takeover.
The unions want written contracts to secure the employment of 30,000 staff.

The consortium says don't worry, nothing will change.
Yeah right, if thats the case, how will they get a return from this huge investment.
If the consortium is so sure nothing will change, then they should put it in writting with a binding contract, should they ? Yes, will they ? NO

So if the staff get cheezed off, then I am sure some sort of industrial action will put some pressure on, No pilots, No Flights.

I still think this has a long way to go, and I still think that its not going to get the all clear, thats showing from the share price staying 30 cents below the price APA are willing to pay.

 

[simongr]

You are forgetting one small detail, The Unions.
Yep seems that all Qantas staff are worried about hhis takeover.
The unions want written contracts to secure the employment of 30,000 staff.

The consortium says don't worry, nothing will change.
Yeah right, if thats the case, how will they get a return from this huge investment.

The way that APA can make a return has been explained here many times - please check out the thread for that explanation.

In relation to the Unions - unless they become a significant shareholders they can do little other than jeopardise their members jobs. Industrial action will really only lead ( (IMO) to expediting the outsourcing/restructuring. It will just give APA a better reason to justify changes - "We ah have a n unreasonable workforce who are holding us to ransom so have to outsource"...

 

[serfty]

Terry McCrann: Bidders know about Aussie values

Commerce Columnist revisits Takeover bid Issues

Bidders know about Aussie values | Herald Sun

Terry McCrann

January 30, 2007 12:00am
Article from: Herald-Sun

THE single most important question in relation to the proposed takeover of Qantas is: are the bidders paying too much or too little?

This is closely followed by -- and not completely divorced from -- whether or not it is a 'foreign takeover'.

...

The bidders are asserting their bid is not foreign; and have not made and do not intend to make a formal request for approval under FATA, the Foreign Takeovers Act.

However even if that position is correct, their bid can be 'foreignised' by a policy decision by the government. Similar to what happened with print media under the previous Keating government.

FATA is legislation with specific thresholds to trigger 'foreign-ness' of a bid or acquisition. The bidders believe they are keeping below those thresholds.

But acquisitions even below those thresholds can require notification and could, as a policy decision, require de facto approval.

...

In my view, they are wrong on their claim. The bid is irredeemably foreign under FATA and they should be required to lodge a formal application for approval.

Indeed, they even go close to conceding that. Or else they are trying to have it 'both ways', and governments should be in the business of saying you can't.

...

All this is not exactly incidental to the money to be made -- they hope -- by the bidding group. Because the fewer conditions attached, the greater the flexibility they have.

One absolutely critical one is timing. When they sell back into the public market. In five years, maybe 10, maybe even two.

The critical advantage they have in taking Qantas private is that they would not have to deliver profits and dividends to public shareholders.

This enables two things. Tough decisions which might hurt profit in the short run; and ploughing all cash-flow into paying down debt.

This in turn plays into the second aspect -- picking a time when airlines are booming to sell back to the public. Say when the oil price is $US35 a barrel and the global economy is running strong.

Qantas profits are extraordinarily leveraged to the oil price and to a lesser extent economic activity. Only a small improvement from the current numbers could cause profits to soar.

Add on the harsh medicine, and my understanding is that the bidders see a possible rate of return of as much as 60 per cent on their play.

Of course, an oil price at say $US100 and a global recession would make the numbers look sick. But they hope to ride any thing like that out, away from the harsh judgment of the stock exchange.

So to answer the question: yes, they are arguably paying too little. But only by being prepared to take a huge risk. A combination of high risk and high return, available only to a bidding group like this.

 

[QF WP]

Qantas's largest shareholder has sold almost half its stake in the airline for less than the price on offer from private equity bidders just days before formal offer documents are due to be sent to shareholders...

 

[Takeshi]

Terry Mcrans Buisness editor in todays papers is very interesting.
If he knows what he is talking about, then this bid cannot get the go ahead as its a breach of the Qantas Sales Act, not to mention the part that the consortium is really acting as one, so it also breaches the limit.
Anyway very interesting.

I still think its going to be knocked on the head.
Why has Qantas's largest shareholder sold half its shares ?
I know its only an extra 30 cents, but when you multiply that by the aqmount of shares sold, then wow thats a lot of money.
Do they know something we don't ??

 

[NM]

I still think its going to be knocked on the head.
Why has Qantas's largest shareholder sold half its shares ?
I know its only an extra 30 cents, but when you multiply that by the aqmount of shares sold, then wow thats a lot of money.
Do they know something we don't ??

Sounds to me like they are hedging their bets. If they knew the deal was not going to happen, they would have sold 100% of their holding and made a good profit, only to buy back into it again later when the deal is squashed and price falls back to the $4.30 mark. Likewise, if they knew it was a done deal they would be holding out for the full $5.60.

So this tells me that the largest shareholder does not know which way the deal is going to go - and neither do I.