KEY POINTS:
MELBOURNE - An A$11 billion ($12.54 billion) takeover bid for Qantas Airways was probably rejected by its independent directors because the conditions were too complex.
Qantas yesterday rejected a A$5.50 ($6.27) per share bid from a consortium lead by Macquarie Bank and US private equity firm Texas Pacific.
Shaw Stockbroking analyst Brent Mitchell said the offer of A$5.50 looked about right but the conditions attached to the offer were a probable sticking point.
"The price is what most people were expecting, but it's really the conditions that go along with it," Mitchell said.
He said Qantas' non-executive directors would probably want a higher price on the conditions offered.
"But certainly on changed conditions they may accept it," Mitchell added.
Qantas said yesterday that it had received a non-binding conditional proposal to acquire 100 per cent of the airline from the consortium, which also includes Allco Equity Partners, Allco Finance and Canadian buy-out group Onex.
"The proposed offer price is $A5.50 per share and incorporates a number of complex conditions, the requirement for unanimous support by Qantas directors and a break fee," the airline said.
The off-market bid also has a 90 per cent minimum acceptance condition.
"The non-executive directors consider that the terms of the proposal are not acceptable," Qantas said.
Qantas shares slumped A14c to A$5.09.
- AAP
