Fund manager says Qantas bid a "long way" short

SYDNEY, Apr 29 (Reuters) An A$11 billion ($9.2 billion) bid by a private equity consortium for Qantas Airways Ltd. was a ''long way'' short of reasonable value for the airline, a leading fund manager opposed to the bid said on Sunday.

Andrew Sisson of Balanced Equity Management, who said he will not accept the A$5.45 a share bid, noted market estimates for Qantas's 2007/08 profit had risen about 36 percent since last August.

''At the beginning we were fairly close to the price we thought was reasonable. Things that have happened since then mean we are a long way from the price,'' Sisson told the Australian Broadcasting Corp.'s Inside Business programme.

Qantas reported in August that its annual profit had fallen 30 percent.

The airline has upgraded its earnings forecast several times since the bid was launched as demand for travel has increased, but the offer remains strongly supported by the airline's board and management.

Sisson said he didn't want to comment on price, but when asked if the bid was about A$1 a share too low, he replied that that was ''in the right ball park''.

Opposition to the takeover from several fund managers has forced the consortium, led by Macquarie Bank, to ease its offer conditions.

It now needs 70 percent of shareholder acceptances instead of 90 percent after renegotiating funding with its lenders.

The bid group, which also includes private equity firm Texas Pacific Group [TPG.UL], last week took out full-page newspapers advertisements in several Australian newspapers urging shareholders to accept the offer. Analysts say there is still a chance the deal could fall through.

Sisson said he thought the consortium would win at least 50 percent of Qantas. Balanced Equity Management held about 4 percent of Qantas shares as of March.

Shareholders have until May 4 to vote on the offer.

The bid group also includes Allco Equity Partners, Allco Finance Group and Canadian investment firm Onex Corp..

Qantas shares closed on Friday at A$5.32.

Reuters DKS GC0738