Revised Qantas bid sets new standards

Changes to the A$11.1 billion private equity bid for Qantas set new international fi nancing benchmarks for all private equity transactions, accordingto market observers. To overcome resistance from key fund managers, the international Airline Partners Australia consortium bidding for Qantas has cut shareholder acceptance conditions from 90 to 70 percent and extended the acceptance deadline […]


Changes to the A$11.1 billion private equity bid for Qantas set new international fi nancing benchmarks for all private equity transactions, accordingto market observers.

To overcome resistance from key fund managers, the international Airline Partners Australia consortium bidding for Qantas has cut shareholder acceptance conditions from 90 to 70 percent and extended the acceptance deadline until May 4. Qantas shares rose 8c to $5.39 as confi dence grew that the stalled $5.45-a-share bid could now succeed. APA said it has acceptances from more than 30 percent of Qantas’140,000 shareholders.

It said it proposed to make a “capital management review” of the airline to pay $1.5 billion of Qantas’ retained earnings as dividends and make a $2.5 billion capital return within 12 monthsof taking control.

It said management policy may involve capital reductions of up to about $4.5 billion in aggregate and payment of dividends of up to 100 percent of Qantas’ retainedearnings.

Some of the dividends and payouts will be funnelled directly from an extra US$1.7 billion (A$2.1 billion) loan provided by APA’s lendersto Qantas.

“Airline Partners Australia’s proposal is that the increase in Qantas’debt be used to fund these distributions,” it said in a statement to the stock exchange.