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Equity group conceded that Qantas bid dead
2007-05-07
The private equity group at the centre of a bungled on-again, off-again bid to take over Australia's national airline Qantas on Tuesday conceded that the deal had failed. Airlines Partners Australia (APA) said while it still had valid legal claims it could pursue to revive the 11.1-billion-dollar (9.2 billion US) deal, it had decided to avoid the uncertainty that lengthy litigation would cause. "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," the consortium led by Australia's giant Macquarie Bank said. The concession cleared the way for Qantas's shares to resume trading on Tuesday after a 24-hour suspension to allow securities regulators to investigate the merits of APA's legal claim. The group however made it clear it was still considering the possibility of making a fresh offer for Qantas, as the Australian press compared the botched bid to a Monty Python comedy sketch. "Given the demonstrated majority shareholder support for APA's proposal, APA is exploring a number of alternatives, including the possibility of making a renewed offer for Qantas," APA said in a statement. The private equity outfit's decision to concede defeat appeared to put paid to a weekend of dizzying and confusing developments in the attempted takeover that left shareholders and analysts gasping for breath. The six-month-old deal first collapsed on Friday when APA failed to garner the 50 percent shareholder support it needed before a 7:00 pm (0900 GMT) deadline. It conceded failure but soon backtracked, saying it would seek the takeover regulator's consent to include late backing from an American investment fund that would have pushed acceptances to 50.6 percent. The panel on Sunday however rejected the attempt to revive the deal, saying the deadline was final. But on Monday, APA said it still had a chance of prevailing if it successfully invoked a clause in its takeover offer that would require shareholders to support the deal with the totality of their shares, not just a portion of them. Such a move would convert partial acceptances into full ones, meaning that it would have had the 50 percent required to pursue the deal before Friday's deadline. The consortium said Tuesday that invoking the clause may well have given it the support it needed to push ahead with the deal, but said would not pursue the matter in the courts to avoid further buffeting Qantas by turbulence. "APA has since discussed this specific term of APA's offer with some of these shareholders who have acknowledged that their acceptances should extend to their entire shareholding," it said, adding however that the legal interpretation "was not clear." "Given the amount of time it would take were the issue to be litigated, and the consequent uncertainty both for Qantas and its shareholders, APA has decided not to pursue arguments that it did achieve voting power in excess of 50 percent by the offer deadline on May 4," it said.
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