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SYDNEY - Shares in failed takeover target Qantas tumbled in early action on the Australian market today, but further acquisition activity hasn't been ruled out.
The buyout group bidding for Australia's Qantas Airways Ltd today said its A$11 billion ($12.5 billion) offer had lapsed, sending shares in the airline down 3.7 per cent, but added that it was considering a fresh bid.
The group, which includes Macquarie Bank Ltd, said it had decided not to pursue a legal case over the issue, ending three days of uncertainty after it failed to get 50 per cent of shareholder acceptances by a Friday deadline.
Qantas shares fell 3.7 per cent to A$5.18 at around 1pm (NZT) today, shortly after a trading halt on the stock was lifted. The stock has risen by about a third since news of a possible bid first emerged in October last year.
Unions, local media and analysts have attacked the bid saga as a farce after the offer was declared dead and then later revived several times over the weekend as the bid group, Airlines Partners Australia (APA), claimed a legal loophole meant it had enough acceptances.
"APA believes that Qantas shareholders need more certainty and, accordingly, it has determined that its bid should be treated as having lapsed on May 4, 2007," APA said in a statement.
Qantas said its board would meet Tuesday and in the near future to discuss growth strategies but said continuity was vital, suggesting senior executives would not stand down.
"This has been an extremely difficult process since the board decided to recommend APA's bid to shareholders," Qantas chairwoman Margaret Jackson said in a statement, amid calls for her resignation.
The bid group, which also includes private equity firm Texas Pacific Group, reiterated it was looking at alternatives, including a new bid. On Monday, APA said the new offer may be pitched at the same price of A$5.45 a share.
"If APA launches a new bid for Qantas at the same price, recommendation from the Qantas board will be vital to its success. However, with virtually no chance of delisting Qantas, APA in our view offer Qantas very little that cannot be achieved under its current structure," JP Morgan said in a note to clients.
APA fell short of the 50 per cent of shareholder acceptances needed to keep the offer alive by Friday's deadline. A late acceptance from a US shareholder brought it up to 50.6 per cent, but Australian regulators refused to allow the late support, effectively killing the bid.
The bid group also includes Allco Finance Group, Allco Equity Partners and Canadian investment firm Onex Corp.
- REUTERS
