Jetfuel From Australia, joined Jan 2005, 2147 posts, RR: 0 Reply 1, posted (6 years 12 months 2 days 23 hours ago) and read 10613 times:
From the Aus Stock Exchange
Qantas Airways Limited ABN 16 009 661 901
Further information and media releases can be found at the Qantas internet website: www.qantas.com.au
SYDNEY, 14 December 2006: The Chairman of Qantas Airways Limited, Margaret Jackson, today
announced that, following detailed negotiations, the Qantas Board had received a revised proposal from
Airline Partners Australia (APA) to acquire 100 percent of the Company for $5.60 cash per share.
Margaret Jackson said the revised proposal provided an attractive premium for Qantas shareholders,
• 33 percent higher than the closing share price of $4.20 on 6 November 2006, the day before the first
speculation about the offer; and
• 61 percent above Qantas’ volume weighted average share price of $3.48 over the six months to that
Ms Jackson said that, subject to receiving an opinion by independent expert Grant Samuel that the offer
is fair and reasonable, the Non-Executive Directors unanimously intend to recommend that shareholders
accept the offer in the absence of a superior proposal, and all Directors intend to accept in respect of
their own shareholdings.
“The Directors believe this offer allows Qantas shareholders to realise significant value for their shares
that has not been fully recognised in the public market,” Ms Jackson said.
The proposal will be implemented by way of an off-market takeover bid, which will be subject to certain
conditions including a 90 percent minimum acceptance condition.
Ms Jackson said the revised proposal followed negotiations with APA since the Board’s rejection
yesterday of its initial proposal. These negotiations resulted in the removal of unacceptable conditions
and a substantial break fee as well as an increase in the price from $5.50 to $5.60 per share.
Under the terms of the offer, the interim dividend that would otherwise be payable in April 2007 will not
be available. However, the Board is evaluating whether a fully franked special dividend could be paid
during the bid period, in which case the offer consideration would be reduced by the dividend amount.
“Following the Directors’ decision, Qantas this morning executed an Implementation Deed with APA and
its members to progress the offer,” Ms Jackson said.
A summary of the key terms of the Implementation Deed is attached.
APA consists of the following investors:
• Allco Equity Partners
• Allco Finance Group
• Macquarie Bank
• other foreign investment funds
QANTAS RECOMMENDS REVISED OFFER
FROM AIRLINE PARTNERS AUSTRALIA
The proposal involves:
• Qantas transitioning to a privately owned company and de-listing from the Australian Securities
• Qantas remaining majority owned and controlled by Australians; and
• retention of the current management team, who will invest in the privately owned company.
Mr Geoff Dixon would continue as Chief Executive Officer and Mr Peter Gregg would remain Chief
Financial Officer under the new ownership structure.
As Executive Directors, Mr Dixon and Mr Gregg did not participate in the Board’s decision-making
processes. However, they agreed with the decision and the rest of the senior executive team also
support the proposal.
Ms Jackson said the consortium had expressed its support for core Qantas strategies, including:
• maintaining an extensive domestic and international airline network, using Qantas’ two-brand
(Qantas and Jetstar) strategy;
• continuing Qantas’ commitment to high quality product and service; and
• improving the company’s cost base to be globally competitive.
“If this acquisition is successful, Qantas will remain a majority Australian-owned, Australia-based airline,”
Ms Jackson said.
“The foreign-based Consortium members are experienced airline investors with a long-standing
association with the industry. The Consortium members have made it clear to us that they recognise the
immense value of the Qantas brand and intend to improve it and grow the business.”
“Qantas makes an enormous contribution to the Australian economy and community. It employs around
37,000 staff — 93 percent of them in Australia. It spends billions of dollars on goods and services from
local suppliers every year, carries a third of all international tourists to Australia and provides a broad
network linking metropolitan, regional and rural Australia to the world.
“If this bid succeeds, Qantas will continue to play a vital role as Australia’s national carrier.”
Ms Jackson said the Board’s formal response will be provided in a Target statement that is expected to
be mailed to all shareholders by early February 2007.
UBS, Carnegie, Wylie & Company and Allens Arthur Robinson are advising the Non-Executive Directors
Issued by Qantas Corporate Communication (Q3512)
Media Enquiries: Belinda de Rome - Telephone 02 9691 3762
Summary of Implementation Deed
Qantas Airways Limited ("Qantas") has entered into an Implementation Deed with Airline Partners
Australia Limited ("APA") and each of the bid consortium members dated 14 December 2006. The
consortium members are Macquarie Bank Limited, Texas Pacific Group, Allco Equity Partners
Limited, Allco Finance Group Limited and Onex Corporation (the "Consortium Members").
Under the Deed, APA has agreed to make a takeover offer for all of the Qantas shares on certain
agreed terms (the "Offer"). The consideration which APA is required to offer Qantas shareholders
is $5.60 cash per Qantas share.
The Deed sets out the conditions of the Offer which are summarised in the announcement released
today by APA.
Under the Deed, Qantas has agreed not to do (or omit to do) anything which will, or is likely to,
result in any of the Offer conditions being breached. However, this does not prevent Qantas or the
Qantas Directors from taking or refusing to take any action provided that the Qantas Directors have
determined, in good faith after having consulted with their external legal and financial advisers, that
failing to take, or failing to refuse to take, such action would or would be likely to constitute a
breach of the Qantas Directors' fiduciary or statutory obligations.
APA warrants that there is no act, omission, event or fact of which APA or any of its officers,
employees and advisers is aware (or which any of them ought reasonably to be aware as a result
of the due diligence conducted on Qantas) that would or is likely to result in one or more of the
Offer conditions being triggered.
Under the Deed, Qantas has agreed, for a period commencing on the signing date until termination
of the Deed (the "Exclusivity Period"), that:
(a) it must not, and must ensure that none of its officers, employees and advisers do not,
directly or indirectly solicit, invite, facilitate or encourage any person, or communicate any
intention to do any of these things, with a view to obtaining any offer or proposal from any
person in relation to a competing proposal for Qantas;
(b) it must not, and must ensure that none of its officers, employees and advisers do not,
negotiate or enter into, continue or participate in negotiations or discussions with any other
person regarding a competing proposal, even if:
(i) that person’s competing proposal was not directly or indirectly solicited, initiated, or
encouraged by Qantas or any of its officers, employees or advisers; or
(ii) that person has publicly announced their competing proposal,
(the "No-Talk Restriction");
(c) Qantas must not without APA's prior written consent:
(i) solicit, invite, facilitate or encourage any party (other than APA or its officers,
employees and advisers) to undertake due diligence investigations on Qantas or
any of its related bodies corporate where to do so would involve a breach of
paragraph (a); or
(ii) make available to any person (other than to APA or its officers, employees and
advisers) or permit any such person to receive any non-public information relating
to Qantas or any of its related bodies corporate,
(the "No Due Diligence Restriction").
The obligations in paragraphs (b) and (c) do not apply to the extent that they restrict Qantas or the
Qantas board from taking any action in respect of a bona fide competing proposal which was not
encouraged, solicited, invited, facilitated or initiated by Qantas in contravention of paragraph (a)
provided that the Qantas board has determined:
(i) that the competing proposal for Qantas is a 'superior proposal' (see definition below); or
(ii) in good faith and acting reasonably, that failing to respond to that competing proposal
would constitute a breach of the Qantas Directors' fiduciary or statutory obligations, after
receiving written advice to that effect from Qantas's external lawyers,
(the "Competing Proposal Exception").
NOTIFICATION OF OTHER APPROACHES
Under the Deed, Qantas has agreed that during the Exclusivity Period it will immediately inform
APA if it is approached by any person to engage in any activity that would breach the No Talk
Restriction or the No Due Diligence Restriction (or would breach those restrictions if it were not for
the Competing Proposal Exception), in which case Qantas must also keep APA reasonably
informed about the nature of any further or ongoing interaction with any such persons, but Qantas
will not be obliged to identify the relevant person to APA, or the details of the competing proposal,
(a) such competing proposal, or details of the relevant competing proposal, has been made
(b) the Competing Proposal Exception permits or requires Qantas to respond to the competing
proposal (in which case Qantas must identify the relevant person to APA, and the details of
the competing proposal).
DEFINITION OF 'SUPERIOR PROPOSAL'
Under the Deed, a 'superior proposal' means a bona fide competing proposal which the Qantas
Directors have determined, in good faith after consultation with their external legal and financial
advisers, is, or is reasonably likely to result in a proposal by the person making the competing
(a) is reasonably capable of being valued, taking into account all aspects of the competing
proposal or the proposal and the person making it;
(b) is reasonably capable of being completed on a timely basis and is no more conditional than
the Offer as at the time of announcement of the Offer; and
(c) is more favourable to Qantas shareholders (as a whole) than the Offer, taking into account
all the terms and conditions of the competing proposal or the proposal.
UNDERTAKINGS BY EACH CONSORTIUM MEMBER
Each Consortium Member will in their specified respective proportions (where such proportions
total 100%) procure that APA is immediately provided with sufficient funds for the due and punctual
performance of any of APA's obligations under the Deed.
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 5, posted (6 years 12 months 2 days 23 hours ago) and read 10557 times:
Well whatever doubts may exist at board level, it presented a unanimous endorsement of the revised offer (as it had to) in the ASX filing.
The real debate is now on, and needs to be further informed by the wider strategy that may be pursued by the consortium, who would have to be aware of other opportunities to get engaged in the sector in the Asia Pacific region.
The comments from the government so far are favourable. But this will go on for some weeks, so we need to be ready for other surprises, including a lot of turf protection by employees, industry stakeholders in tourism and travel retailing, and renewed attempts by Singapore Airlines to gain access to the trans Pacific routes.
I don't like this deal for the risks it poses to Qantas. But as always, I'm happy to be wrong if only good outcomes occur.
StealthZ From Australia, joined Feb 2005, 5550 posts, RR: 47 Reply 10, posted (6 years 12 months 2 days 22 hours ago) and read 10275 times:
Quoting Pilotdude09 (Reply 7): now he cant use the excuse "we need to make a profit for our shareholders".
Well yes he can, the airline, or whatever it morphs into over time, still has shareholders.
The shares may not be publicly traded but there are still entities that hold a stake in the company and they will expect profits. Damn sure they did not start this process because of their love of aviation!
Those entities also have share holders who will expect a profit on their investment.
Indeed the short term profit imperative may be an even higher priority than it has been todate.
If your camera sends text messages, that could explain why your photos are rubbish!
Lumberton From United States of America, joined Jul 2005, 4708 posts, RR: 21 Reply 11, posted (6 years 12 months 2 days 22 hours ago) and read 10229 times:
Well, no answer from the mods on restoring the previous thread, so let's bring this subject back to life, shall we? Here's an interesting take on the whole subject from "The Age": Qantas hails momentous occasion
Quote: antas chairman Margaret Jackson has described it as a momentous day after the airline accepted a takeover bid from an international consortium.
"Today is a very momentous and exciting day for Qantas," Ms Jackson said.
"Last night the board received a compelling offer from Airline Partners Australia (the consortium).
"It is an offer that my colleagues and I recommend unanimously to shareholders.
"The offer of $5.60 per share allows shareholders to realise value for their shares that has not been fully recognised in the public market."
Ms Jackson said Qantas was not just its shareholders but also about its staff and the communities in which the airline operated.
Well, I guess that if I stood to gain by this transaction, I'd hail it as a "momentous" day as well! I suspect that others may differ in their opinion. Frankly, I will be keenly interested in the subsequent politics being played out here--as well as public opinion. Will this be a "hard sell" to the Australian public? In the U.S. we hardly notice M&A activity anymore, but Qantas is more than just a mere company in the eyes of may Australians. This will likely get emotional.
(Apologies if I'm covering ground that was discussed in the deleted thread. I wasn't able to read it. After all, it was deleted....)
"When all is said and done, more will be said than done".
Senliture From Australia, joined May 2000, 430 posts, RR: 0 Reply 12, posted (6 years 12 months 2 days 22 hours ago) and read 10197 times:
Mixed feeling. I am happy because I now have a confirmation about the value of shares are indeed much higher than the normal $3 to $4. I bought some shares few years back and it was $3 and I said QANTAS should always be around $5, then SARS, then high petrol price, and now finally $5.6. But the sad thing is, I will no longer be able to own QANTAS shares, it is all private now.
Antares From Australia, joined Jun 2004, 1402 posts, RR: 40 Reply 13, posted (6 years 12 months 2 days 21 hours ago) and read 10125 times:
Should the deal take place and the betting today would be that it will, Qantas will disappear from the scrutiny of a publicly listed company and many questions that its management has to answer currently will not necessarily require an answer in the near future.
Bill142 From Australia, joined Aug 2004, 8407 posts, RR: 9 Reply 14, posted (6 years 12 months 2 days 21 hours ago) and read 10086 times:
I should have bought some Qantas shares when the rumors started. The price has gained 33% since the rumors began (to the agreed sale price) and 61% compared to the weighted index average. The big question is what will happen in the future. Texas Pacific don't have a great repuation for improving the service of a service companies they have bought. Personally the consortium members should keep their finger out and let the management team run it how they see fit.
Quoting Lumberton (Reply 11): I agree with Lufthansa here. The thread should be restored. If there is that much sensitivity, edit the title. The buyout is being reported all throughout the world press. It's r-e-a-l news. Restore the thread....
The thread has been deleted. Build a bridge and get over it.
MilesDependent From Australia, joined Sep 2001, 848 posts, RR: 0 Reply 15, posted (6 years 12 months 2 days 21 hours ago) and read 10040 times:
I would have thought it would go to an extraordinary general meeting of shareholders, and the shareholders will vote. The Directors will recommend that the deal goes through, but it has not gone through until after the vote. That is what I would have thought.
Antskip From Australia, joined Jan 2006, 887 posts, RR: 6 Reply 17, posted (6 years 12 months 2 days 21 hours ago) and read 9995 times:
Quoting Bill142 (Reply 17): The big question is what will happen in the future
Upside is QF will expand its routes dramatically with the massive injection of funds. Downside is that it will be much more vulnerable to fluctuations in fortune: debt ratio will go from 45% to 75-80%, which means QF is based more on mud now rather than rock. QF will continue to make money on the goodwill built up over decades as a National airline. When the time is right for its new owners, whoever they may be, the brand could well change completely, and QF will be no more. Just give them a few years...
If it is the thread I'm thinking of, then it needed to be deleted.
It had a vague title Qantas Announcement or something like that and then the link provided said nothing of the announcement. The thread starter message was just something along the lines of, "check this out at 1048."
If that's the thread you guys are talking about, then it definitely needed to be deleted.
However.....chill out. No worries here. You guys have a good one going here with FAR more detail.
Quoting Lufthansa (Reply 10): KROC was the moderator who removed it. And I believe did so on highly questionable grounds.
Don't blame him, I'm the one who suggested the deletion. IF it is the same thread I'm thinking of, then my reasons are listed above.
Once again, though....no worries. You guys have a good discussion here and no mods are doing anything under questionable conditions.
QANTAS077 From Australia, joined Jan 2004, 5798 posts, RR: 42 Reply 19, posted (6 years 12 months 2 days 21 hours ago) and read 9927 times:
Quoting Australia1 (Reply 19): now effectively under US control, the big red rat will play into DJ's hands.
the largest investor Allco Equity & Allco Finance is an Australian company...they have 35% of the stock and the largest voting right. I doubt much will change with the company in a negative way, infact, things should get better with the injection of equity.
USAF336TFS From United States of America, joined Apr 2005, 1443 posts, RR: 53 Reply 20, posted (6 years 12 months 2 days 21 hours ago) and read 9879 times:
Quoting Australia1 (Reply 19): now effectively under US control, the big red rat will play into DJ's hands.
In actually Texas Pacific Group (Representative of us American "red rats") AND Onex (Canadian) control less then 40% of the company. Therefore it would be much more accurate to label it as "North American control... blah,blah,blah"
The majority 60% remains firmly in Australian hands, as it should be IMHO.
[Edited 2006-12-14 03:58:32]
336th Tactical Fighter Squadron, 4th Fighter Wing, Seymour Johnson AFB
Australia1 From , joined Dec 1969, posts, RR: Reply 21, posted (6 years 12 months 2 days 20 hours ago) and read 9853 times:
Quoting QANTAS077 (Reply 22): the largest investor Allco Equity & Allco Finance is an Australian company...they have 35% of the stock and the largest voting right. I doubt much will change with the company in a negative way, infact, things should get better with the injection of equity.
Quoting USAF336TFS (Reply 23): In actually Texas Pacific Group (Representative of us American "red rats") AND Onex (Canadian) control less then 40% of the company. Therefore it would be much more accurate to label it as "North American control... blah,blah,blah"
The majority 60% remains firmly in Australian hands, as it should be IMHO.
you don't spend $11B to not get effective control. Who are the Australians? Mac bank? they'd sell their mother if there was a cent in it for them !!!