QANTAS being taken over by Macquarie Bank..

[Mal]

I'm wondering if that particular clause (which is now under question) is actually legal or not.

Is it an unconscionable clause to implement and thus invalid if challenged in a court?

Especially since the takeover documents (presumably) had a tickbox for accepting for part of your shareholding and many people only accepted for part of their shareholding.

 

[oz_mark]

Govt asks Qantas to clarify ownership

From Yahoo
Govt asks Qantas to clarify ownership - Yahoo!7 News

Fears that Qantas may already be majority foreign-owned prompted the federal government to demand the airline clarify its ownership status.

Federal Transport Minister Mark Vaile wrote to Qantas asking for clarification on whether the airline had breached its foreign ownership cap, amid concerns it is now more than 50 per cent foreign-owned because of share trading during its failed takeover bid.

 

[PaulZ]

I'm wondering if that particular clause (which is now under question) is actually legal or not.

Is it an unconscionable clause to implement and thus invalid if challenged in a court?

Especially since the takeover documents (presumably) had a tickbox for accepting for part of your shareholding and many people only accepted for part of their shareholding.

If you have a look at the attached Acceptance form... It clearly states that "You will be deemed to have accepted the Offer in respect of all your Qantas shares if you sign and return this form"

It also has a field where it tells you your Holding in Qantas (No. of shares).

In my opinion, if one were to cross out the number of shares field, and insert a new number, and then sign the bottom, your signature is autually authorising the acceptance of the number of shares you manually entered. Your manual adjustment clearly repudiates your consent to accept all shares you hold.

APA only wanted acceptances from people who were willing to accept the offer for all their shares, hence the clause 7(3)(f) in their offer.
Therefore, if you have clearly indicated you do not accept the offer for all your shares and only some (by manually adjusting the number of shares held), i doubt a court would consider your signature at the bottom acceptance for all shares held.

Therefore, I believe the outcome is that the entire notice is invalid.

Does that make sense?

Therefore I believe APA has once again shot themselves in the foot...

I doubt there are any institutional investors who would have accepted for every single share they held... Does that make them all invalid?

I don't know if my theory above makes sense, but I think it does?
For extra insurance, it would have been great for the shareholder to cross out the quote above: "You will be deemed to have accepted the Offer in respect of all your Qantas shares if you sign and return this form" and initial where they change the number of shares held... So that there was no ambiguity at all to what the shareholder was actually consenting and authorising.

 

[simongr]

This would have been so obvious to everyone, except maybe the poor mum & dad shareholders who didn't read the 3 million page bidders statement.
I am sure the big funds would have known such an important clause ???

Umm - what the hell are you talking about? The "poor mum and dad shareholders" - the people that took the $1-$2 premium over what they held the shares for already? You are trying to paint a picture of APA holding a gun to people's heads demanding they sell their shares.

Can you just answer the question - what is going to be so great in the future of a non-APA owned airline? Everytime I raise this sort of question you ignore it and rant on about the poor australian public and the theft of the airline - what exactly do you think is going to be better?

 

[PaulZ]

Umm - what the hell are you talking about? The "poor mum and dad shareholders" - the people that took the $1-$2 premium over what they held the shares for already? You are trying to paint a picture of APA holding a gun to people's heads demanding they sell their shares.

Can you just answer the question - what is going to be so great in the future of a non-APA owned airline? Everytime I raise this sort of question you ignore it and rant on about the poor australian public and the theft of the airline - what exactly do you think is going to be better?

Simongr I tend to agree with your above views.

I think the general public simply likes to know that the Australian Public has a significant stake in "Australia's National Airline" (via Superannuation if not Direct holding). Its as simple as that. The public doesn't like seeing those big (usually foreign) predators coming in and buying it up WHEN we all know that they will make an absolute killing doing so... otherwise they wouldn't bother.

 

[simongr]

Thanks for that - I just dont think that these sort of emotional arguments should come into this - its a business not a monument.

Now if the same thing happened to the Opera house I would be vigorously denying the bid - but this is not an icon any more than the meat pie is an icon.

 

[serfty]

Simongr I tend to agree with your above views.

I think the general public simply likes to know that the Australian Public has a significant stake in "Australia's National Airline" (via Superannuation if not Direct holding). Its as simple as that. The public doesn't like seeing those big (usually foreign) predators coming in and buying it up WHEN we all know that they will make an absolute killing doing so... otherwise they wouldn't bother.

So true, I believe the public have been happy in the past to take comfort somehow in the feeling that Qantas 'will always be at least 51% Aussie owned', not caring really about 'who' the actual aussies are who own it. Maybe having a few shares themselves.

The perception of having a PE "ogre" come in, buy it up, rip 4,000,000,000+ dollars out of it, then hand it back, maybe slightly bruised is not a comforting one the "the Mum & Dad owners".

 

[Mal]

If you have a look at the attached Acceptance form... It clearly states that "You will be deemed to have accepted the Offer in respect of all your Qantas shares if you sign and return this form"

Good point. I didn't read up properly the documentation before jotting down my thoughts! :shock: There also is a T&C that allows APA to modify your form to make it correct if they deem it to not be correctly filled out so that could cover the situation where you modify the form to suit your needs.

They really are clowns though. If they thought they had the correct number of shares, they should have announced it after 7pm on Friday. Not umm'd, aah'd, announced they failed, then oops we found a form under the sofa type behaviour, then later brought out these half acceptances.

 

[JohnK]

Can you just answer the question - what is going to be so great in the future of a non-APA owned airline?

The great thing about a non-APA owned airline, especially QF, in the future is that APA does not own them. Enough said....

 

[Altair]

You cannot alter the Acceptance Form without the consent of all parties. If APA were using the partial Acceptance of shares in their notification to the ASX it means they accepted them.
I have been involved in some legally dubious share buy-backs. One had burried in the form that non-return of the form indicates that you accept the terms, which is in clear violation of contract law that "silence is not acceptance".
APA will not have their latest attempt accepted by the courts, but who will the defendent be the ASX?
I expect another tilt at QAN with a higher price, incorporating another dividend, that will be accepted.

 

[Kendall Roy]

APA says Qantas bid lapses | The Daily Telegraph

APA gives up on existing bid

 

[swissbignose]

The perception of having a PE "ogre" come in, buy it up, rip 4,000,000+ dollars out of it, then hand it back, maybe slightly bruised is not a comforting one the "the Mum & Dad owners".

I think you're missing a couple of zeros there. In any case, APA have declared to bid to be lapsed.

APA says Qantas bid lapses | NEWS.com.au

 

[Myrna]

There is a good article on the following link - How to fix UP Qantas. http://www.aireview.com.au/index.php?act=view&catid=8&id=5872&setSub=1

 

[Altair]

There is a good article on the following link - How to fix UP Qantas. http://www.aireview.com.au/index.php?act=view&catid=8&id=5872&setSub=1

Interesting reading.
I actually found the article to be quite ametuer, lacking details and emotional regarding many of its recommendations.
QAN has been trying to sell its holidays and catering division in the past, it could not find a buyer at a good price. Air Freight is expanding, why would you just ignore it and concentrate on PAX, it is like saying "You should have two seperate airlines one international (Qantas) the other domestic only (Australian, TAA).
Regarding gearing levels, when you have a large number of new aircraft coming in the gearing will increase, be funded by cash flow or use leasing. This is what QAN faces in the next few years.

 

[simongr]

I agree with Altair its not a great article. I am not sure about the 3 1/2th recommendation:

"The board should ask the government to either enforce the Qantas sale act and limit foreign holding to 49%" <- I am still waiting for the "or do something else..."

I agree with some of the sentiments - QF needs to do something - I am not sure that these are all the answers. There is an element of spite as well regarding the selling off of terminals - the logical buyer is Macquarrie - I dont think that you can just exclude them because of this bid...

 

[Kendall Roy]

Equity Prices Results

Latest Prices

 

[Myrna]

Market already opened, but I think Qantas share price is still in halt. It will probably be lifted later on today as APA has submited its statement to the ASX conceding its position.

 

[maninblack]

The Macquarie press release about avoiding lengthy litigation was largely a distraction. Actually the Federal Court can hear and determine these matters very quickly. I think that the real issue may have been that the ownership had gone over 50% foriegn and Macquarie knew this would be revealed if all stock had to be voted under the clause, meaning that their bid was dead in the water.

This story is far from over in the longer term. What I don't undestand from some posters though is the logic that prefers Qantas under it's current structure, surely the current board, most of whom will go after a takeover, is not one to put any particular confidence or trust in, as has just been demonstrated. Mind you i suppose neither is the takeover consortium, they haven't shown a great deal of competence either, a case perhaps of "better the devil you know".

PS. Bye bye Margaret, it's been a blast.

PPS. Look after those veins.

 

[oz_mark]

The Macquarie press release about avoiding lengthy litigation was largely a distraction. Actually the Federal Court can hear and determine these matters very quickly. I think that the real issue may have been that the ownership had gone over 50% foriegn and Macquarie knew this would be revealed if all stock had to be voted under the clause, meaning that their bid was dead in the water.

I think that the lack of clarity around ownership was a significant issue, and I suspect that the hedge funds want some clear picture so they can go on some rampage with their money elsewhere rather than having it tied up in a situation that could go anywhere.

 

[Mal]

Looking at the wonderful source of information Wikipedia, I note the following comment relating to Airline Partners Australia:

"On Sunday 6 May 2007, the Takeovers Panel ruled that Airline Partners Australia did not have the minimum holding required at 7.00pm, Friday 4 May, as stipulated in the bid. They also saw no sufficient basis to re-open the bid. APA has stated it will now launch a takeover for the New Zealand carrier Air New Zealand, under a similar structure."

Huh. Air NZ? Hmm. Methinks someone has something seriously wrong there or a mischievous prankster has defaced the wiki page - does anyone know anything about this?