Key Qantas stakeholder says it won’t accept takeover offer

SYDNEY, Australia, AP

A key stakeholder in Qantas Airways said Friday it would not accept a A$11.1 billion (US$8.9 billion; euro6.7 billion) bid for the airline, throwing into doubt one of Australia’s biggest proposed takeovers. Qantas stock sank 3.1 percent on the news. Airline Partners Australia, the investment group making the bid, immediately announced it was extending the deadline for shareholders to accept their A$5.45-a-share offer by more than two weeks to April 20 and was considering its options. Balanced Equity Management, an institutional fund that owns about 4 percent of Qantas, said Friday would not accept the bid led by Australia’s Macquarie Bank and the Texas Pacific Group at the current price.

The investment group needs to secure 90 percent of shares for the deal to move ahead, but market sentiment has been moving against the bid in recent weeks on speculation that it undervalues the company. “Since the announcement of the bid in December 2006, equity markets have appreciated significantly,” Balanced Equity managing director Andrew Sisson said in a statement.

“Given the current level of the share market, in the absence of an adverse development in relation to Qantas, or a fall in equity markets, we do not intend to accept the bid of A$5.45 per share in respect of the shares we manage on behalf of others,” he said in the statement.

Qantas shares plummeted around 4 percent to A$4.89 immediately after the announcement, before recovering to close 3.1 percent lower at A$5.06.