It is reported that UBS Global Asset Management has bought another 1% of Qantas over the last week, increasing their ability to block the Qantas APA deal up to 6.5% of the company.
Analysts suggest that this indicates that rather than trying to avoid the conflict that being seen as the deal blocker may cause, UBS’ Paul Fiani investing another $100million shows that either they believe that Qantas is a good investment or that they are increasing their ability to block the deal with other investment managers.
A report in The Australian says if what the newspaper hears about Fiani’s attitude to the deal is anywhere near accurate, Airline Partners Australia and the board and management of Qantas should be very, very, very worried indeed.
With Fiani and Balanced Equity’s Andrew Sisson, now controlling about 10.5% of Qantas and 90% required to get the deal over the line, they can now cause the collapse of the deal without the support of any other investors.
The report in The Australian also this is before taking into account the rejection by Qantas retail shareholders, considered by some analysts to be 6% but by others to be as high as 12%, which if the latter is the case, a cause for serious concern by APA.
With consensus emerging that Qantas shares are worth more than the APA offered $5.45, pressure is building on the deal with a potential collapse imminent.
What is most interesting about all this is that UBS is an adviser to APA, so the concept of one of its advisors’ fund managers unravelling the whole deal regarding which UBS has also been advising could cause a range of issues in the future and embarrassment for UBS.
Adding to the emerging scenario is that other sections of UBS control another 2.3% cent of Qantas, but they do not have the same longer term investment goals as Fiani and are reportedly willing to accept the deal and reap a quick profit.
The discussions around the Board tables and in the Chairmen’s offices at both APA and Qantas would have to very interesting to hear at this extremely challenging and interesting times – if only……………!
Report by The Mole with some material from The Australian
