The Macquarie-led Airline Partners Australia consortium has decided not to make a renewed offer for Australian airline Qantas, after failing to secure the 50 percent shareholder acceptance it needed for its A$11.1billion ($9.2 billion, €6.8 billion) bid.
APA, the Macquarie-led private equity consortium that includes Texas Pacific Group, local group Allco, and Canada investment firm Onex, said in a statement: “in the current environment and circumstances a renewed offer on terms acceptable to APA would not be likely to succeed.”
There were hopes that despite failing to secure 50 percent shareholder acceptance by the allotted date, the consortium might have been able to rescue the A$5.45-per-share bid. The hedge fund controlled by US billionaire Samuel Heyman decided to sell half its 10 percent stake less than five hours after the deadline, according to media reports.
Despite the consortium’s bid receiving the backing of Qantas’ board, Qantas deputy chief executive Peter Gregg told the Sydney Morning Herald earlier this week: “If they come back it would have to be better than A$5.45, that’s for sure.”
The group’s bid, after passing the 50 percent milestone, would have also needed to acquire 70 percent shareholder acceptance to succeed as an unconditional deal. This would have been difficult to secure, as the bid had been greeted with hostility by two of the airline’s biggest institutional shareholders, UBS Global Asset Management and Balanced Equity Management, who between them hold more than a 10 percent stake.
It is the most high-profile buyout bid failure in the Asia-Pacific region since the rejection of KKR’s bid for Coles last year, although the US buyout group has now begun due diligence with the Australian retailer.
TPG was also reported this week to be considering pulling out of the bidding for Spanish airline Iberia, because of a reluctance to join forces with rival buyout group Apax Partners – the approach favoured by its partner British Airways.
Qantas’ share price fell 3 cents to A$5.25 at the close of the Australian market.