ozstamps

As I understand it a higher price can't simply be offered to a selected few.

AFAIK the ENTIRE bid process needs to be abandoned, and started again for that to occur?

NM

Look at the other option. UBS say they are not yet convinced to sell and suggest they want a higher price. This tells the market that the deal may not succeed and the current price remains below the offer price. Meanwhile UBS is buying more and more stock stating that they are wanting to grow to 10% to have a blocking interest. If they do eventually sell for the $5.45 offer price they stand to make a good short-term profit from their recent purchases.

bensyd

Your correct so the small shareholder gets to ride on the coat-tails of UBS...or maybe they are just being altruistic

ozstamps

Forget UBS, Deutsche Bank just revealed they now have about 8.4%.

Credit Suisse also now report they have 5.39%.

http://www.abcmoney.co.uk/news/28200746697.htm

Interesting times.

Glen

serfty

Having a blocking interest, UBS can completely hold out in the hope that APA abandon their current offer and make a new, better, one. However, that may not suit APA as any move to drop the 90 per cent condition, should enable those who have already lodged acceptances to the deal could to then pull out and rejoin at the better offer.

It's a gigantic game of Bluff.

There is obviously a lot of money to be made here and according to Terry McRann (It's about the Planes) it mainly revolves around the sale and lease back of AU$7 billion in Qantas Aircraft.

Institutions such as UBS have seen this and are wanting in on the action ...

number_6

TPG (US investment LLP that is part of the QF bid) is preparing to buy IB for USD 4 billion. It has asked for confidential accounting data, in preparation for a bid within 30 days for IB. TPG is also bidding for AZ, fwiw, and is well capitalized (so it could fund a higher bid for QF if desired). BA happens to own 10% of IB, further tangling the airline ownerships.

number_6

These are all hedge fund positions. Hedge funds have managed to get over 50% of QF (using some elaborate ploys to game the Australian ownership restrictions. Remember that hedge funds rarely hold positions for more than 3 months, and never for a full year, so there is a lot of ownership change going on (with more to come, one way or the other).

Fwiw, the airline business has always been about capital cost and depreciation. Airlines have had zero operating profits as a group for the past 50 years, yet are one of the most profitable industries. You lose money flying but make it up in volume.

ozstamps

I find 12 month graphs entertaining at times.

Interesting how when Qantas run by same folks as now, and virtually just as profitable as now could have been trading under $3 as recently as August.:

http://finance.yahoo.com/q/bc?s=QAN....=on&z=m&q=l&c=

The fact the stock has never once got above $5.40 tells me no-one thinks this was a bid going to succeed. If so lining up at $5.40 and getting $5.60 is an easy 4% short term gain.

There was a large 2 page piece on the Qantas deal in Saturday's SMH.

The board and Margaret Jackson especially, came out of it smelling like manure to the professional market in general, was my reading of it.

A1pax

Now that it looks like APA is going to get most of Qantas by lowering their acceptance level. But, what has annoyed me the most was why should they pay the 15 executives at Qantas more than $200m for doing nothing. These people are not the owners of the Qantas, but the shareholders. Why the shareholders are not being rewarded by APA paying a higher price as asked by some institutional shareholders? With the $200m APA could have purchased a new aircraft or retain the engineering & maintenance staff instead of making a very few privileged staff at Qantas millionaires. Surely these people have been well renumerated - their salaries are in line if not above market levels and the flying benefits are more than compensating for their labour. Just my 2c!

serfty

APA have acceptances of 31% of the shares from 50% of the original shareholders.

I wonder if this dropping of the 90 per cent condition enables those who have already accepted the deal to pull out with the view to rejoining at any improved offer that may occur in the future.

There must be a huge amount of money to be made here ...

This is why institutions such as UBS & Credit Suisse are wanting in on the action ...

fmckenzie

From today's SMH

THE Airline Partners Australia consortium bidding for Qantas plans to gouge $4 billion out of the airline within the first year of its takeover succeeding.

So the new owners will pay in around $3.5 billion to get control and take out $4.5 billion (some from Qantas's retained earnings and some from new borrowing) over the next couple of years.

ozstamps

I highly recommend anyone interested to read the several pages on it today in SMH.

As previous poster mentioned the "investors" by approving a quite insane dividend level and an insane share buy back, and likely flogging off the Qantas options of a new aircraft fleet, will clear way over a billion, exit the company in a year or so, and leave the borrowings and resultant mess in place for the next unfortunate board.

Astounding it is legal to do really.

Naturally by getting 90% and then being able compulsorily mop up the other 105 they hoped ALL of the bickies came their way based on this outrageous stripping of Qantas assets.

My hunch is the large shareholders will sit back take the massive dividend coming their way (which was never meant to be for them) and laugh their heads off.

ozstamps

Nope as the $ offer per share has not changed in any way.

They will simply miss out on the obscene planned very short term order payouts to shareholders as they signed up too fast.

It may be that as the newly revealed equity stripping plan is just so obscene that a class action might prevail to let them change their mind if they now wish as this was never publicly revealed until now. Expensive and drawn out tho.

perthite

Might be useful to provide a link.

Start here
http://www.smh.com.au/news/business/...971263357.html

ozstamps

Thanks .. I was not aware they had links to all the peices .. there were pages ot it!

Raiders to gouge $4b from Qantas

April 13, 2007

Other related coverage
Qantas raiders may share spoils
Qantas deal looks sealed
Qantas bidders moving to Plan B
Banks back privateers' Plan B attempt on Qantas
Banks agree to new deal in Qantas bid

THE Airline Partners Australia consortium bidding for Qantas plans to gouge $4 billion out of the airline within the first year of its takeover succeeding.

Confirming suspicions the Macquarie Bank and Texas Pacific Group-led group is set to make a killing from the purchase, the consortium revealed yesterday that it planned to pay $1.5 billion in dividends and a $2.5 billion capital return within 12 months of gaining control.

"Airline Partners Australia's proposal is that the increase in Qantas's debt be used to fund these distributions," it said in a statement to the sharemarket.

The consortium was forced to disclose details of its so-called capital management review because under the revised bid announced yesterday the company will remain public

etc