Qantas Airways said it might spin off some freight operations and other units or return billions of dollars to shareholders as it rethinks its future after a failed A$11.1 billion ($12.55 billion) takeover bid.
Qantas shares hit a record high, rising above the failed offer price for thefirst time after the airline raised the prospect of generous capital returns.
Qantas management, who backed the failed takeover, told investors they might "demerge" its express freight joint venture and other operations. It was also reviewing ownership of its frequent flyer programme.
"They are pursuing opportunities to expand and improve the business but they do realise there are risks going forward from competition and fuel price increases," said Shaw Stockbroking analyst Brent Mitchell, who attended the briefing.
Qantas shares hit A$5.54 yesterday, topping the A$5.45 a share offered by a consortium including Macquarie Bank, whose bid came unhinged earlier this month. Shares closed at A$5.46 yesterday.
Analysts said prospects of capital returns of up to A$2 billion and positive trading conditions were exciting the market. Several have upgraded their ratings on the stock this week.
Even Macquarie's research division said in a note that the airline could be worth A$8.57 a share, over 50 per cent more than the bid group wanted to pay.
Qantas, dubbed the Flying Kangaroo, was briefing investors for the first time since the bid collapse and two board members, including chairwoman Margaret Jackson, bailed amid heavy criticism of the way management handled the takeover.
"I am confident that stability will be forthcoming for Qantas," chief executive Geoff Dixon, who backed the bid, told investors in a delayed webcast of the briefing.
The airline said it was looking at a number of ideas inherited from the takeover group, including shareholder distributions via dividend policy, share buyback or demerger.
"We are also looking at growth opportunities which are real, particularly in some of our portfolio business. Any acquisitions would be on a small scale," Dixon said.
