Qantas Take-over?

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Old Dec 13, 06, 8:56 pm
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Originally Posted by Mwenenzi View Post
The QF board cannot sell Qantas, because they do not own or control all the shares. The QF board can only "recommend" Only the share holders can sell. It has been reported recently that 47% is foreign owned
I am aware that board members of a listed company can only 'recommend' shareholders accept offers, however the premium is far too good for the shareholders to refuse.

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Old Dec 13, 06, 9:23 pm
  #77  
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Originally Posted by SQ744 View Post

I am aware that board members of a listed company can only 'recommend' shareholders accept offers, however the premium is far too good for the shareholders to refuse.

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SQ744
It needs 90% shareholder approval.

I doubt they'll get it.

$6 was the right price. The board saw the personal pot of gold and salivated.

Mansfield & Co will never pay that.




http://biz.yahoo.com/ap/061213/austr...tas.html?.v=22
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Old Dec 13, 06, 9:53 pm
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Originally Posted by Wongo View Post
The cost of redeeming tickets might be going up after this takeover.....
Anyone having that feeling like a 3rd world country, citizens draining their bank if something bad just happened their country to avoid inflation....
I am in favour of a class action against Qantas if they try to devalue FF points. I am presently locked in to them because of the points I have but still need some more to book an award for 2 of us that will empty the bank and then I can go over to some better program.

The line starts here

Lonely Flyer......
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Old Dec 13, 06, 9:59 pm
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Originally Posted by ozstamps View Post
It needs 90% shareholder approval.

I doubt they'll get it.

$6 was the right price. The board saw the personal pot of gold and salivated.

Mansfield & Co will never pay that.




http://biz.yahoo.com/ap/061213/austr...tas.html?.v=22
Maybe. We'll see. Considering the share price labored around 3 to 4 dollars for around the last ten years, $5.60 seems pretty favorable. Only time will tell.

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Old Dec 13, 06, 11:21 pm
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Old Dec 13, 06, 11:47 pm
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Something to rant about:
Under AEQ's persentation, Page 8, they want to grown Internationally by Deathstar...
You guys are on the spot with asset stripping... Page 9 Allco sector experience incl Long-term aircraft leasing... I think we will be flying older planes within 3-5 years for less profitable route.
Page 10... I wonder will the Howard Govt open the SYD-LAX to others... They wanted it for the duopoly market...

Is this the same way Man U was purchased in UK?
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Old Dec 14, 06, 2:23 am
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Originally Posted by Wongo View Post
The cost of redeeming tickets might be going up after this takeover.....
Anyone having that feeling like a 3rd world country, citizens draining their bank if something bad just happened their country to avoid inflation....
methinks that if you've got a bunch of points you should be turning them into tickets before they get devalued again.......hmmmmm all those lost Ansett points...

hvb
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Old Dec 14, 06, 3:05 am
  #83  
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I actually don't believe it myself, but there is a chance that things might get better. Once the new owners have sold the FF Program the new owners of this might turns it into something more attractive than it currently is. With more partnerships and more promotions compared to what we have now. Problem is that I will wake up in 5 minutes and only remember my wishfull dreaming..... Think positive.
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Old Dec 14, 06, 6:49 am
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Sort of OT: Website down

I wonder if the take-over issue has something to do with the QF website being down for several hours since about midday AEST.
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Old Dec 14, 06, 1:41 pm
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Details of Funding?

Well The Age has provided some details of the APA plans.
http://www.theage.com.au/news/busine...685825045.html
Increase the debt level by 75% or $7.5B. So they have only $3.5B at risk?
Yates comments regarding this? "The reality is the business is significantly undergeared in comparison with other international airlines." Hmmm....which ones DL, UA, AZ the other sound and quality airlines?
The comments from QF Chair Jackson about how APA share the concern over the wellbeing of the airline is a farce.
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Old Dec 14, 06, 2:59 pm
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Originally Posted by Wongo View Post
The cost of redeeming tickets might be going up after this takeover.........
The sky might fall in, the planes might be painted pink, all food might be vegetarian and they will start flying out of bass hill.

We dont yet have any evidence that the FF program will be sold, devalued, enhanced (in both senses of the word) or abolished.

I wouldnt be surprised if the cost of awards went up - but I wouldnt have been surprised if existing management put up the cost of awards. Remember its existing management that will be running the business so they will do nothing more than they were already planning to do.

Why do you assume that it will all go down the toilet?
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Old Dec 14, 06, 3:22 pm
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Originally Posted by Blackcloud View Post
Well The Age has provided some details of the APA plans.
http://www.theage.com.au/news/busine...685825045.html
Increase the debt level by 75% or $7.5B. So they have only $3.5B at risk?
Yates comments regarding this? "The reality is the business is significantly undergeared in comparison with other international airlines." Hmmm....which ones DL, ....
The irony is that DL operated for 20 years with zero debt -- the ultimate in being undergeared. After years of beating by analysts to take on more debt, DL did so, had a few good years, followed by bankruptcy (and now a hostile takeover from a smaller airline, which has also been in bankruptcy twice). Of course that could never happen to QF (in part because it has too much presence). The markets definitely punish prudently run companies, and QF with its lucrative markets makes a big target.

The irony is that if there was an open market at work QF would be valued at over AUD 7 per share (using the same basis as CX, for example, and CX has a lot more competition in its markets); but the requirement for Australian ownership depresses the price considerably. If that is ever lifted, the shareholders would have an instant windfall.

The current offer is still too low, with 3 good years they will have bought QF for free (all paid for out of QF assets and cash flow). There needs to be another 2 billion on the table for it to be a fair price in an open market. We'll see what happens.
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Old Dec 14, 06, 4:41 pm
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Friday's edition of the Financial Times (London) reports that Geoff Dixon could have a dual role at Qantas.

Originally Posted by Financial Times
The private equity consortium that on Thursday secured Qantas’ acceptance of an A$11.1bn (US$8.7bn) buy-out offer, is considering installing Geoff Dixon, the carrier’s chief executive, as chairman as well if the airline is privatised early next year, according to people familiar with the matter.

Combining the roles is considered contrary to governance best practice at listed companies, and awarding the pugnacious Mr Dixon stronger executive powers would underscore the vastly different management approach favoured by buy-out groups.

Qantas shareholders will within weeks vote on whether to follow Thursday’s board recommendation to accept the takeover bid from a consortium including Australia’s Macquarie Bank and Texas Pacific Group of the US.

Capital Group of the US, which owns a 12.8 per cent stake, is believed to back the offer of A$5.60 per share. Qantas stock ended Thursday 4 per cent higher at A$5.28.

In a widely hailed move, Mr Dixon promised to hand over any proceeds from a long-term incentive plan, potentially worth A$60m, to Aboriginal charities.

If the consortium decides against making Mr Dixon chairman, it is understood that Bob Mansfield, the former chairman of Telstra, would be a leading candidate to assume the post.

Mr Mansfield, who is a non-executive director at Australia’s Allco Finance, one of the main consortium members, is a confidant of John Howard, prime minister, and would be expected to help smooth relations with lawmakers in Canberra.

Airline Partners Australia, the consortium vehicle, will have an 11-member board, including two non-executives unconnected to the buyers. Sir Rod Eddington, the former British Airways chief executive who is also on the Allco Finance board, is not expected to join the APA board.

Allco Finance and Allco Equity Partners, its listed affiliate, will together own about 35 per cent of Qantas’ equity. Mr Dixon, who will remain at Qantas for at least three years, declined to comment about the chairman’s role. He also hit out on Thursday at a warning by the Moody’s rating agency that it might downgrade the airline’s debt to junk status in the wake of the buy-out. “I believe the statement was right out of line. The capital structure is more than adequate.”

The buy-out will be 80 per cent debt-financed, to be arranged by Morgan Stanley. Qantas was advised by UBS and Carnegie Wylie.
There is also a comment from the FT's Lex column

Originally Posted by FT Lex
What a difference a day makes. Barely 24 hours after rebuffing its private equity suitors, Australia’s Qantas Airways has agreed to a slightly sweeter bid: the buyers have upped their equity offer by less than 2 per cent and dropped a few conditions. Is Australia’s biggest private equity acquisition ready to fly?

The 6 per cent discount to the offer price at which Qantas’s shares closed yesterday suggests a certain scepticism over whether the deal will go through. Investors certainly believe the revised A$5.60-a-share offer is as good as it gets. This seems fair. Aviation ownership rules mean the pool of potential buyers is shallow. The buyers, a consortium including Macquarie Bank of Australia and Texas Pacific Group, are offering a 50 per cent premium to the three-month average. On adjusted enterprise value to forecast 2008 earnings before interest, depreciation, amortisation and aircraft leases, the price tag values Qantas below Cathay Pacific, Hong Kong’s de facto flag carrier, but at a slight premium to the more comparable Singapore Airlines.

The concerns of feisty labour union members and die-hard nationalists have also been taken on board. The new owners insist it will be business as usual and that they will not wield the axe over assets, routes or even the red kangaroo logo.

The big difference, of course, is the capital structure. The buy-out implies an enterprise value of about A$24bn, of which 80 per cent will be funded by debt. The financing package being put in place is understood to imply net debt to the tune of about six times ebitda. That is lower than recent leveraged buy-outs in Australia, but a big bite for a company in a notoriously cyclical industry that also has large capital spending plans. This looks like one of private equity’s boldest bids – and one it will need to exit well before the credit cycle turns.
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Old Dec 14, 06, 5:05 pm
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Originally Posted by number_6 View Post
The irony is that if there was an open market at work QF would be valued at over AUD 7 per share (using the same basis as CX, for example, and CX has a lot more competition in its markets); but the requirement for Australian ownership depresses the price considerably. If that is ever lifted, the shareholders would have an instant windfall.

The current offer is still too low, with 3 good years they will have bought QF for free (all paid for out of QF assets and cash flow). There needs to be another 2 billion on the table for it to be a fair price in an open market. We'll see what happens.
Yep, although Australian transport companies have always traded at a discount to their international counterparts even without government enforced ownership caps.

In the context of the regulatory environment the offer is actually more than fair. It would be highly unlikely that the Government would look to lifting the sale restrictions and so you have to value the offer on the basis of those restrictions.

I have to say I was quite impressed by Geoff Dixon saying he will be setting up a charitable trust that will recieve all of the $60 million he will receive , I don't think I would have been that generous
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