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SYDNEY - The $A11.1 billion takeover offer for iconic Australian airline Qantas remained alive today after bidders received last-minute support from a large investor.
The Airline Partners Australia (APA) consortium last night all but conceded defeat in the bid, announcing it appeared to have failed to reach the 50 percent level required to extend the offer.
But in a dramatic turnaround, APA said early today a late acceptance from a large US investor after last night's 7pm (AEST) deadline had passed meant it intended to press ahead with the bid.
It said it would approach regulators to allow the offer to continue.
"On Friday evening, APA announced that, subject to confirmation, it appeared that the offer had failed to reach the 50 percent level required for the offer to proceed," it said in a statement.
"However, subsequently on Friday, APA received an acceptance from a large investor, which would be sufficient to take acceptances for Qantas shares to more than 50 percent.
"APA intends to make submissions to the Takeovers Panel to allow the offer to continue."
APA said the late support took acceptances to a majority of 50.6 percent of Qantas shares, accepted on behalf of 58 percent of all Qantas shareholders.
The Qantas board was expected to meet today to discuss the latest developments.
APA had been hoping by last night's deadline to take acceptances to 50 percent or over, so that the $A5.45 per share offer would be automatically extended by two weeks.
Under takeovers law, passing the 50 percent threshhold would give the bidders breathing space to secure the 70 percent it needs for the offer to fully succeed.
Led by Australia's largest investment bank Macquarie Bank, the APA consortium includes US private equity firm Texas Pacific Group, Canadian private equity firm Onex Corp and Australian investment groups Allco Equity Partners and Allco Finance Group.
Qantas shares closed last night up one cent at $5.38.
The overnight development is just the latest twist in the controversial bid, which is opposed by unions who fear the airline could be broken up or shift overseeas.
The Qantas board rejected an initial takeover offer from APA in mid-December before accepting a sweetened bid shortly afterwards.
The consortium restructured its offer last month in a bid to boost its chance of success, lowering the minimum shareholder acceptance condition to 70 percent, from 90 percent.
APA says its plans for Qantas will significantly enhance the airline, guarantee strong growth and be beneficial for employees and customers.
Grant Mitchell of Shaw Stockbroking said he always expected the bid to be close.
"Certainly a lot of people thought the bid wouldn't succeed, so they have been reluctant to accept," Mr Mitchell told ABC radio.
Despite this morning's development APA is still a long way from a successful takeover, he said.
"It does make it very difficult to achieve the 70 percent that they hoped to for the bid to succeed and it is now running up against some of the hardcore shareholders that have indicated that they wouldn't accept this bid at this current price," Mr Mitchell said.
"Obviously they (APA) have indicated to that investor that the share price will fall significantly if the bid was finished at this time and it was in the best interest of that shareholder to accept the bid, either for part or all of their holdings."
Market analyst Professor Justin O'Brian from the Centre for Applied Philosophy and Public Ethics also told the ABC the board of Qantas had some serious questions to answer about its advice to shareholders.
"I think the market will look very, very closely at whether or not the board of Qantas, in actual fact, read the market effectively, read where private equity was happening on a global basis and whether or not what they were putting forward to the shareholders of Qantas was actually in the best interest of the corporation," he said.
"It does seem that the market has said quite emphatically that the board of Qantas has got it wrong."
- AAP
