QANTAS being taken over by Macquarie Bank..

[JohnK]

@JohnK - What has honour got to with anything in business?

Of course you are right. What am I thinking that honour or ethics exist in society today let alone business. I have edited my post.

 

[Altair]

Altair - I presume you mean GF Gulf Air, not GA Garuda Indonesia?

Now I am really am embrassed. ...Yes I meant Gulf Air.

 

[Kiwi Flyer]

Now I am really am embrassed. ...Yes I meant Gulf Air.

Dont be embarrased. Not as if GA (or GF for that matter) as an airline abbreviation comes up very often.

 

[NM]

Some people seem to thinking the foreign ownership limit may affect the buy-out, relieving a little heat from the share price today - currently at $4.92, down from yesterday's close of $5.00.

Anything could happen from here.

 

[simongr]

I think its the "not more than 25% in the hands of a single owner" that is the issue. The bid has a 49% stake held by Texas.

 

[NM]

I think its the "not more than 25% in the hands of a single owner" that is the issue. The bid has a 49% stake held by Texas.

Hmm, now lets see .... 49 < 25 for small values or 49 (or large values of 25 )

 

[JohnK]

I think its the "not more than 25% in the hands of a single owner" that is the issue. The bid has a 49% stake held by Texas.

The plot thickens all the time. A company cannot own an airline and more than 5% of SYD airport at the same time.

Flying Kangaroo under siege

QANTAS was on the hop from corporate hunters last night, with an $11 billion takeover bid for the airline raising fears of higher ticket prices and Australian job cuts.

The airline confirmed yesterday it was being targeted by a consortium that analysts warned would hit passengers and airline workers hard.

Corporate giant Macquarie Bank - which already owns most of Sydney's toll roads and the airport - emerged as the lead bidder, along with a US private equity firm.

While analysts warned the sale to Macquarie and its foreign partners would lead to higher airfares, Qantas workers called on Prime Minister John Howard to guarantee jobs.


<snip>

Under the Airports Act 1996, no company is allowed to own an airline and more than 5 per cent of Sydney airport at the same time.

As well as being a potential part-owner of Qantas, Macquarie Bank owns 15 per cent of Macquarie Airports, which in turn owns 55.8 per cent of Sydney airport.

More...

 

[simongr]

15% of 55.8% is about 8% - but I would think MacBank would sell down that proportion to get hold of QF.

Also - they could issue shares in MacAirports to dilute their shareholding and then pay back the proceeds of the sale to existing shareholders and use that to fund part of the purchase...

 

[pacblue]

I can't work out all the excitement. It's NOT going to happen.

There's far too much against this deal.

This is a try-on that's all.

Howard has already said foreign ownership regulations regarding Qantas won't be changed.

I don't care how clever the deal Mac Bank and TX Pac have worked out - Qantas is - and will remain - politically sensitive, because of the perception of the airline within the wider community (whether it be ill-founded or not).

Qantas will remain a protected species.

Pacblue

 

[SeatBackForward]

Qantas will remain a protected species.

Pacblue

Now thats communist talk!

You think Jho would be really concerned?, once the money starts being flashed around, he'll submit quicker than he did to George Dubya's Iraq fantasies.

 

[pauly7]

You think Jho would be really concerned?, once the money starts being flashed around, he'll submit quicker than he did to George Dubya's Iraq fantasies.

Of course he is concerned. Snowy Mountains anyone? There is no way that Howard or Costello is going to change the rules for this. No way in hell. Hasn't anyone seen the public opinions, all the polls, online, tv, paper etc had heaps of respondents and a vast majority don't won't QF as a majority foreign owned company - and thats what they will be watching not McBanks wads of cash.

Howard is not stupid, QF is a revered and iconic Australian business.

It has been quite funny watching the hysteria and reaction to the announcement of McBanks intentions... I didn't think it would extend onto here so much though

They may snap up some shares, inject some capital but QF ain't trucking overseas anytime soon.

 

[Tooner]

Snowy Mountains anyone? There is no way that Howard or Costello is going to change the rules for this. No way in hell.

The difference here is that Snowy Hydro is owned by the Gov't (State & Federal), while the Feds think they own Qantas. Also, I haven't seen anything suggesting Big Mac are looking for legislation to be changed. In fact, all the commentary so far suggests they are being very careful to fit in with all legislative requirements to make sure the Gov't would have to make a brave decision to stop a takeover. That would be a big decision.

I would agree with Geoff Dixon; this has a long way to go, and cold showers all round until the details are known.

 

[oz_mark]

Fascinating that QF upgraded its profit forecast shortly after the news of the takeover bid...

 

[JohnK]

Are certain people waiting to put extra money in their pockets?

Takeover target Qantas raises profit forecast, and pressure on bidders

Bloomberg News, Reuters
Published: December 1, 2006


SYDNEY: Qantas Airways, the target of a takeover from Macquarie Bank and Texas Pacific Group, said Friday that profit growth in 2007 would be the fastest in three years because of a decline in fuel costs and rising demand for travel.

Profit before tax was forecast to rise 30 percent to 872.6 million Australian dollars, or $687 million, from 671.2 million dollars a year earlier, extending 13 straight years of earnings growth, the airline said.

The forecast could force the bidders to increase their offer for the biggest Australian carrier, analysts said.

More...

 

[lovetravellingoz]

Papers are saying today thata bid will be announced Mondayish witha price of $5:50 to $6 per share.

 

[JohnK]

This is ludicrous!

Qantas shares soar on takeover talk
Peter Litras
December 11, 2006 - 11:34AM

Qantas shares have soared in early trade as speculation grows a takeover of Australia's biggest airline is imminent.

Qantas shares are up 20 cents, or 4 per cent, to $5.25, on the expectation Macquarie Bank and US private equity firm Texas Pacific will make a formal $11 billion takeover offer, valuing Qantas shares between $5.50 to $6. An announcement on the proposal is expected later today or tomorrow.

The airline's shares traded as low as $2.93 at the end of June, just prior to the peak in world oil prices.

More...

 

[simongr]

Why is it ludicrous? People are speculating. Its not that much of a rise really. And people will have to pay a premium at the moment. If you held QF shares would you be selling at the moment? Your options are either to wait for the offer from MacBank or hold onto your shares at the existing price.

 

[lovetravellingoz]

Well as I have Qantas shares I am certainly a more than interested watcher at present...

If the price pushes past $5;50....which it should do once the bid is announced.....I will be thinking seriously about selling

 

[drron]

Why is it ludicrous? People are speculating. Its not that much of a rise really. And people will have to pay a premium at the moment. If you held QF shares would you be selling at the moment? Your options are either to wait for the offer from MacBank or hold onto your shares at the existing price.

Well I bought shares in the float and sold them when they hit $5-that was 7 years ago.The yield since has not been as good as the big banks.The bank shares have more than doubled since then.
The big rumour is that the consortium is going to saddle QF with another $5billion debt by hocking the planes.Personally I would take the money and run.The last thing to do would be buy again if it is refloated.

 

[JohnK]

Why is it ludicrous? People are speculating. Its not that much of a rise really.

Please forgive me if the exact timeline is not completely accurate.

- It is June and QF shares have hit a low point at $2.98!
- Dixon announces that he wants to stay at the helm of QF for many years to come.
- An unjustifiably high increase in fuel surcharges in August.
- Share price recovers and sits at around $4.00 for a few months but oil prices have been dropping sharply.
- Media pressure and we see a minor token relief in fuel surcharges.
- Qantas profit forecast revised on the back of high fuel surcharges, fuel hedging and falling oil pries.
- Oil prices continue to drop yet no announcements on any further relief to fuel surcharges
- Details are released of a Qantas takeover by a company that has a long history of slicing through bigger companies and selling bits & pieces and then refloating company with high debt
- Share prices rise to $5.26, almost doubled from June, on speculation that the takeover offer may be around $5.50

If the takeover succeeds at $5.50/share the vultures would be making around a 20% profit with Qantas sliced up, loaded with debt, refloated. If the takeover bid has to be increased to $6.00/share the vultures are only making about 12% profit and they are not really prepared to take a high risk for a low return on investment. Anything over $6.00/share and you can forget a takeover.