Qantas bid still in doubt despite government approval

Government approval of the Macquarie-led consortium’s A$11.1bn bid for Qantas, an Australian airline, might not be sufficient to get the deal approved by shareholders.

Shares in Australian airline Qantas hit a three-year low today, as concern mounted that the consortium trying to buy the carrier would see their A$11.1 billion bid blocked by shareholders, despite the government approving the deal.

The share price fell by as much as 2.3 percent before closing down 1.4 percent at A$5.09 – nearly 7 percent below the A$5.45-per-share bid price – as investors worried that large institutional shareholders were planning to reject the consortium’s bid as being too low.

The consortium, which comprises Australian groups Macquarie and Allco, US buyout firm Texas Pacific Group and Canadian investor Onex, had an A$11.1 billion bid for the airline accepted in December.

The bid has since been awaiting regulatory approval, with some groups expressing concern about the airline ending up in foreign hands, but yesterday the government rubber-stamped the deal after the group agreed to a number of conditions. Treasurer Peter Costello said: “Foreign control of Qantas will not occur. A majority of directors of Qantas must be Australian citizens, and Qantas must remain based in Australia.”

The consortium needs 90 percent of shareholder acceptances for its offer to succeed.