Travel News Today

A consortium that made a failed AUD$11 billion (USD$9 billion) bid for Australia's Qantas Airways said on Thursday it would not launch a fresh offer, denting the airline's share price.

The Airline Partners Australia (APA) consortium, which included Macquarie Bank, said it believed a renewed offer on acceptable terms was not likely to succeed.

«On that basis APA has decided not to proceed with a renewed offer for Qantas at this time,» the group said in a statement.

Shares in Qantas, which slipped after the bid failed to secure enough acceptances to proceed last week, fell 2 percent before recovering to be down 0.8 percent at AUD$5.24, about 4 percent below the AUD$5.45 a share bid price.

«At the moment shareholders may be expecting improved profits so they really are just going to hang on to the ride,» said Robert Hook, a portfolio manager with S.G. Hiscock & Co. «And in addition to that, if someone else is going to come along it's then going to be a bonus.»

Analysts said Qantas would continue to concentrate on its strategy of growing its low-cost Jetstar subsidiary in Asia under Chief Executive Geoff Dixon, who would have led the airline after the buyout.

The Qantas board was also due to meet on Thursday, amid speculation about the future of Chairman Margaret Jackson, who has been criticized for supporting the takeover bid too enthusiastically.

Jackson has told local media that she intends to stay on at the airline.

The consortium's decision not to launch a fresh bid for Qantas had been expected given a lack of support from the airline's board, the need to negotiate again with bankers and an upcoming Australian election.

«At some stage they may look at it again, but there's a lot of deals around and these people have various interests,» said Shaw Stockbroking analyst Brent Mitchell.

A source familiar with the bid said the consortium -- which included private equity firm Texas Pacific Group, Allco Finance Group, Allco Equity Partners and Canadian investment firm Onex -- had been unwound.

The group believed any fresh bid should have been on the same financial terms as the first offer, given the challenges faced by Qantas from new competition, the source said.

However, Qantas indicated last week that it would not back a new takeover offer pitched at the same price.

«If they come back it would have to be better than AUD$5.45, that's for sure,» Qantas Deputy Chief Executive Peter Gregg, who supported the original bid, told the Sydney Morning Herald.

The consortium admitted defeat early last week following three days of uncertainty after it failed to get 50 percent of shareholder acceptances for the bid by a Friday deadline.

Qantas senior management had supported the initial offer, but it was criticized as too low by key shareholders, who forced the bid group to lower the level of acceptances needed for success.

The airline has upgraded its earnings guidance three times in the past year, but faces serious competition from the launch of a rival Australian domestic service by Asian airline Tiger Airways.

(Reuters)