Qatar take 9.99% stake in IAG (BA Owners)
Jan 30, 2015, 7:39 am
#31
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A quick perusal of the City Takeover Code makes me think that they have stopped at 9.99% because if they acquired 10% and then made an offer for a significantly larger stake (to bring their holding up to maximum 49% they are allowed, for example) they would have to offer to buy that larger stake at the highest price paid to acquire any shares in the 10% stake. See Rule 11.1 of the Takeover Code. If they stop at 9.99% they can acquire another 40% at a lower price.
Jan 30, 2015, 8:02 am
#32
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0.999... (where the 9s are recurring, or in other words the 9s go on forever) is exactly identical to 1 (by the succinct proof you gave). In fact "0.999..." is better seen as an alternative way of writing "1" rather than a separate number that happens to be the same as 1.
Later, this can be rounded to 0.99
And finally, to 0.9.
Eventually, they can drop decimals, and award 0 Avios per flown mile.
Jan 30, 2015, 8:43 am
#34
Join Date: Jun 2003
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A quick perusal of the City Takeover Code makes me think that they have stopped at 9.99% because if they acquired 10% and then made an offer for a significantly larger stake (to bring their holding up to maximum 49% they are allowed, for example) they would have to offer to buy that larger stake at the highest price paid to acquire any shares in the 10% stake. See Rule 11.1 of the Takeover Code. If they stop at 9.99% they can acquire another 40% at a lower price.
In other words by buying less than 10% QR have kept their options open to bid for more stock in a share-offer rather than a cash-offer. But since QR is not itself listed, IAG's shareholders aren't going to accept QR shares so this is a moot point.
So the explanation that they don't want to attract the EU's attention in relation to significant influence is more likely.
Interesting the Delta can own 49% of Virgin (no different to SQ before them) but FR have been told they have to sell their 29% of EI. Too much truble-making I guess.
Jan 30, 2015, 8:54 am
#36
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Isn't it either:
- Qatar Airways takes a near 10% stake rather than 49% because it doesn't have the cash to pay with IAG's near all-time high share price of 550 pence per share.
- No majority shareholder is willing to sell it stake?
- Qatar buying more than a 29.9% stake would require it under UK takeover rules to formally submit a bid to take over the company.
QUESTION: Did the IAG share sale come from the troubled Spanish bank Bankia *which had a sizable stake in IAG of over 10%
- Qatar Airways takes a near 10% stake rather than 49% because it doesn't have the cash to pay with IAG's near all-time high share price of 550 pence per share.
- No majority shareholder is willing to sell it stake?
- Qatar buying more than a 29.9% stake would require it under UK takeover rules to formally submit a bid to take over the company.
QUESTION: Did the IAG share sale come from the troubled Spanish bank Bankia *which had a sizable stake in IAG of over 10%
Jan 30, 2015, 9:20 am
#37
Join Date: May 2011
Posts: 2,379
I don't read it that way. 11.1 says that if you acquire 10% for CASH, any subsequent takeover offer must also be for CASH (with or without a share / share+cash alternative), at the same price or higher. (Contrast with 11.2, when an offer must be in securities.)
In other words by buying less than 10% QR have kept their options open to bid for more stock in a share-offer rather than a cash-offer. But since QR is not itself listed, IAG's shareholders aren't going to accept QR shares so this is a moot point.
So the explanation that they don't want to attract the EU's attention in relation to significant influence is more likely.
Interesting the Delta can own 49% of Virgin (no different to SQ before them) but FR have been told they have to sell their 29% of EI. Too much truble-making I guess.
In other words by buying less than 10% QR have kept their options open to bid for more stock in a share-offer rather than a cash-offer. But since QR is not itself listed, IAG's shareholders aren't going to accept QR shares so this is a moot point.
So the explanation that they don't want to attract the EU's attention in relation to significant influence is more likely.
Interesting the Delta can own 49% of Virgin (no different to SQ before them) but FR have been told they have to sell their 29% of EI. Too much truble-making I guess.
Jan 30, 2015, 9:21 am
#38
Join Date: May 2011
Posts: 2,379
Surely they'd be exempt, what with it being illegal for them to own more than 49.9%? I assume Delta didn't have to submit a bid to take over Virgin Atlantic.
Jan 30, 2015, 10:14 am
#40
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In fact, it may be down to IAG's own Articles, not the law. Here's FR's relevant policy/Articles: https://www.ryanair.com/doc/investor...ShareOwner.pdf
Note that the rules appears to be total non-EU shareholdings <50%, not just all individual non-EU shareholders < 50%. If FR's operating rights are put in doubt, they can take away non-EU-held shares' voting rights or require that they be sold. Presumably IAG have similar Articles.
Jan 30, 2015, 10:19 am
#41
Join Date: May 2011
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The rule is there to avoid trapping other shareholders as minorities to the new significant shareholder. I don't see why they would be denied this protection because of an EU law and the domicile of the new significant shareholder. I don't know what the remedy would be: QR accept all shares tendered to them but are then have to sell the excess?
In fact, it may be down to IAG's own Articles, not the law. Here's FR's relevant policy/Articles: https://www.ryanair.com/doc/investor...ShareOwner.pdf
Note that the rules appears to be total non-EU shareholdings <50%, not just all individual non-EU shareholders < 50%. If FR's operating rights are put in doubt, they can take away non-EU-held shares' voting rights or require that they be sold. Presumably IAG have similar Articles.
In fact, it may be down to IAG's own Articles, not the law. Here's FR's relevant policy/Articles: https://www.ryanair.com/doc/investor...ShareOwner.pdf
Note that the rules appears to be total non-EU shareholdings <50%, not just all individual non-EU shareholders < 50%. If FR's operating rights are put in doubt, they can take away non-EU-held shares' voting rights or require that they be sold. Presumably IAG have similar Articles.
Jan 30, 2015, 10:50 am
#42
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In my haste to discuss mathematics with LondonElite (I never thought I'd say that!?) I missed this excellent post. 
Indeed another excellent post I missed! Welcome to FlyerTalk eagleflyer and you have set the bar high there for your future posts—I look forward to them. Please do join in and hopefully we can provide you with some useful information in return.
Delta were investigated by the EU Commission for having an alleged undue influence on VS. I cannot find the result of their enquiry so perhaps it is not finished yet.
http://aviationweek.com/awin/shareho...trol39-398421/
It is worth noting that the EU already investigated DL/VS before DL was permitted to buy the shares.
I think this is a matter of EU law as well. An EU airline cannot be "effectively controlled" a non-EU entity as a matter of law.
A quick perusal of the City Takeover Code makes me think that they have stopped at 9.99% because if they acquired 10% and then made an offer for a significantly larger stake (to bring their holding up to maximum 49% they are allowed, for example) they would have to offer to buy that larger stake at the highest price paid to acquire any shares in the 10% stake. See Rule 11.1 of the Takeover Code. If they stop at 9.99% they can acquire another 40% at a lower price.
http://aviationweek.com/awin/shareho...trol39-398421/
It is worth noting that the EU already investigated DL/VS before DL was permitted to buy the shares.
The rule is there to avoid trapping other shareholders as minorities to the new significant shareholder. I don't see why they would be denied this protection because of an EU law and the domicile of the new significant shareholder. I don't know what the remedy would be: QR accept all shares tendered to them but then have to sell the excess?
In fact, it may be down to IAG's own Articles, not the law. Here's FR's relevant policy/Articles: https://www.ryanair.com/doc/investor...ShareOwner.pdf
Note that the rules appears to be total non-EU shareholdings <50%, not just all individual non-EU shareholders < 50%. If FR's operating rights are put in doubt, they can take away non-EU-held shares' voting rights or require that they be sold. Presumably IAG have similar Articles.
In fact, it may be down to IAG's own Articles, not the law. Here's FR's relevant policy/Articles: https://www.ryanair.com/doc/investor...ShareOwner.pdf
Note that the rules appears to be total non-EU shareholdings <50%, not just all individual non-EU shareholders < 50%. If FR's operating rights are put in doubt, they can take away non-EU-held shares' voting rights or require that they be sold. Presumably IAG have similar Articles.
Jan 30, 2015, 10:52 am
#43
Join Date: Jun 2003
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Yeah I know the reasoning behind the rules, I just don't see how it would work given that they conflict with each other. Presumably either one of them has some sort of provision to account for that, or one of them is generally seen to over-rule the other. EU law generally over-rules member state law - is the forced takeover rule a UK or an EU law?
Jan 30, 2015, 1:53 pm
#44
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A quick perusal of the City Takeover Code makes me think that they have stopped at 9.99% because if they acquired 10% and then made an offer for a significantly larger stake (to bring their holding up to maximum 49% they are allowed, for example) they would have to offer to buy that larger stake at the highest price paid to acquire any shares in the 10% stake. See Rule 11.1 of the Takeover Code. If they stop at 9.99% they can acquire another 40% at a lower price.
Jan 30, 2015, 2:07 pm
#45
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“If you did not have unions you wouldn't have this jobless problem in the western world… It is caused by unions making companies and institutions uncompetitive and bringing them to a position of not being efficient,” Akbar Al Baker
Get him on the Board of Directors I say.
