A report in The Age this morning says that the APA claims that the Qantas bid still has wings and that to sell or not to sell, is the question confronting not only Qantas’ institutional investors but its retail shareholders as uncertainty continues to hang over the fate of Airline Partners Australia’s $11.1 billion bid for the airline.The report goes on to say shareholders bailed out of Qantas stock in morning trade, taking a grim view of Balanced Equity Management’s decision on Friday not sell its 4% holding in the airline, with shares falling as low as $4.95 before buyers moved in, lifting the stock to a close at $5.09, up 3¢ on the day.
They are still well below APA’s offer of $5.45 a share but the gains across the sharemarket in recent months have left some investors, including Andrew Sisson from Balanced Equity, convinced that the offer price is too low.
UBS Global Asset Management is refusing to disclose what it plans to do with its 6% stake in Qantas, but speculation is rife that it will follow Balanced Equity’s lead and if it does, this could effectively sink the bid.
A group of investment bankers and lawyers involved in the buy-out held lengthy talks with APA again yesterday to evaluate ways to breathe life back into the bid, with the original takeover proposal stipulating that APA needed to obtain at least 90 per cent of Qantas shares for the bid to proceed, but with the combined shareholdings of Balanced Equity and UBS likely to preclude that level of acceptances, APA has asked investment banks financing the Qantas bid to drop the condition.
APA is expecting an answer to its question within days, but if it gets the green light, it could proceed with the buy-out, with the banks, including Deutsche Bank, Citigroup and Goldman Sachs, needing to decide whether the risk of backing the bid would be acceptable if APA could not offer Qantas assets as security, which analysts believe is a high risk strategy.
APA would not comment on the progress of talks but rejected suggestions the bid was dead, saying it still planned to pursue the full takeover of Qantas.
A Report by The Mole from The Age
