Qantas bid group edges closer to securing offer

Sydney, May 3: A consortium bidding for Australia's Qantas Airways Ltd. said today its voting power in the carrier had increased to 27.78 per cent as it edged closer to securing the world's largest airline takeover.

The consortium, including Macquarie Bank Ltd. and private equity firm Texas Pacific Group [TPG.UL], was still well short of the stake it needs by tomorrow for a successful bid, although some analysts were tipping a late rush of acceptances.

The consortium, Airline Partners Australia (APA), said its voting power had increased from 17.63 per cent previously.

The number of shareholder acceptances for the bid rose to 32.96 per cent from 25.94 per cent as reported yesterday.

Shareholder acceptances include a facility where institutions can accept but retain the right to withdraw.

APA needs 70 per cent of shareholder acceptances for its 11 billion Australian dollar (9.1 billion dollar) bid to be successful.

The offer closes at 7 pm (0900 GMT) tomorrow but can be extended by two weeks if APA reaches more than 50 per cent before then.

Some analysts said they expected shareholders to wait until the last minute before accepting.

''Like uni students, journalists and taxpayers, shareholders work to the deadline. Quite rationally, they seek to retain control of their shares for as long as they can,'' BBY analyst Fabian Babich said in a note to clients.

Other analysts said some shareholders might hold on to the stock in the hope they can be part of the buyout group if APA achieves 70 per cent but does not move to a full takeover.

Hedge funds, which hold more than 40 per cent of the stock, are expected to be key to pushing the offer over the line.

APA eased its offer conditions for Qantas last month after some key shareholders said the 5.45 Australian dollar per share offer was too low. It previously wanted 90 per cent of shareholder acceptances, a level at which it could compulsorily acquire the remaining stock.

The sale of the national icon, dubbed the Flying Kangaroo, has met with some political and strong union opposition but was backed by the Australian government as well as Qantas management.

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

Qantas shares were trading 0.6 per cent firmer at 5.37 Australian dollar at 0029 GMT.

Reuters>