Qantas takeover talks in "very early days"

24-11-2006

Qantas takeover talks in
Qantas boss Geoff Dixon has attempted to cool media speculation surrounding a possible takeover offer for the Australian airline, by stressing that talk of a bid is in its "very early days".

The comments from the company's chief executive come after the airline confirmed on Wednesday that it had received a takeover approach from the Macquarie Bank and the Texas Pacific Group, a US buy-out company.

News of a possible deal, which according to reports could be worth up to AUS$10.3 billion (£4.2 billion), has prompted a wave of nationalist feeling across the Australian press, whilst unions have expressed concern that any takeover of Qantas could lead to job losses.

But addressing a business audience in Singapore yesterday, Qantas chief Mr Dixon said of the takeover rumours: "These are very early days, I mean very early days."

"I would like to suggest, and obviously very politely, that some people take a cold shower and settle down," he added.

Meanwhile, Australian prime minister John Howard has said that while his government would not support a break up of Qantas, there was nothing to prevent such a move under current legislation.

Analysts have suggested that the consortium led by Australian bank Macquarie and Texas Pacific could choose to divide up Qantas and sell of its non-core assets, including two airport terminals and its catering and holiday businesses, if it is successful in a takeover bid.

Under current Australian regulations, no individual entity is permitted to hold a stake of over 25 per cent in Qantas, while shares held by international investors must not exceed more than 49 per cent.

Speaking on Australian radio, Mr Howard also indicated that his government would not be altering foreign investment rules or the current cap on individual shareholdings in the wake of the takeover rumours, but stressed that under existing rules, the country's flagship airline could be divided into separate parts.

Indicating that the government would not seek to block such a move, Mr Howard said: "We can't preach the philosophy of the free market and every time something arises which might look a bit uncomfortable, dart around and say we're going to pass a new law to stop it happening."

"You can't run a country like that and we don't intend to do that," he added.

Macquarie, which indicated on Wednesday that it had held "indicative discussions" with Qantas over a possible takeover deal, stressed at the time that if a firm proposal was made it would "adhere to the existing rules governing the ownership of Qantas".

A statement issued by the bank emphasised that, in particular, there would be "continuing majority Australian ownership" of Qantas.




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