KEY POINTS:
SYDNEY - The private equity consortium seeking to take over Qantas says shareholders should accept the $A11.1 billion ($12.62 billion) offer after the federal Government said it would not block the deal.
Airline Partners Australia (APA) is offering shareholders A$5.60 per share and needs 90 per cent acceptance to proceed.
The consortium said it already had acceptance for about 12 per cent of shares on issue.
The Government cleared the way for the takeover on Tuesday after APA had provided a deed of undertaking guaranteeing Qantas would remain Australian-owned and controlled.
The enforceable deed also promised that maintenance and repairs would be carried out in Australia, and that Qantas' frequent flyer program would remain.
APA director Bob Mansfield yesterday urged shareholders to accept the deal.
"The cash offer represents a significant premium for shareholders and the binding undertakings given to the Government guarantee that Qantas will remain majority Australian owned and controlled," Mansfield said.
"The only material positive condition to be satisfied is reaching 90 per cent acceptances," he commented.
"To date, acceptances, including instructions held under the institutional acceptance facility, have been received for approximately 12 per cent of total shares on issue.
"It is particularly pleasing that more than 37 percent of Qantas shareholders by number have already accepted the offer."
The offer closes on April 3.
"However, the sooner APA's offer becomes unconditional, the sooner we will be able to pay shareholders," Mansfield said.
"As we have previously stated, the offer price is final and will not be increased in the absence of an alternative proposal."
Some analysts believe the deal's biggest potential stumbling block is institutional shareholders, who may hold out for a higher share price.
So-called "mum and dad" investors are expected to embrace the deal, to capitalise on bargain stocks elsewhere in the market, given the recent stock market slump.
APA comprises Australia's Macquarie Bank, Allco Finance Group and Allco Equity Partners, with US private equity giant Texas Pacific Group and Canada's Onex Group.
The privatised Qantas will comprise Allco Equity Partners with 27 per cent, Texas Pacific 25 per cent, Macquarie Bank less than 15 per cent, Allco Finance Group 8 per cent, Onex 12.5 per cent, other foreign investors 11.5 per cent and Qantas management 1 per cent.
The fine print
Six of the undertakings given to the Government by Airline Partners Australia if it buys Qantas.
* Qantas and Jetstar brands will continue to operate separately, both locally and internationally.
* Qantas group will buy new aircraft in line with market needs.
* Qantas will support regional routes and the improvement of its domestic network.
* Qantas customers will continue to have access to a competitive loyalty programme and the (sale of Qantas) will not result in any loss of frequent flyer points for members of the Qantas Frequent Flyer Programme
* Qantas' practical assistance to Australians in times of emergency, such as evacuations from foreign emergencies, will continue.
- AAP
