Qantas bid in disarray as shareholder rejects offer

An $8.7 billion bid for Qantas Airways Ltd.The world`s biggest airline takeover, was in disarray on Friday after a key shareholder said it would vote against the offer, forcing the buyout group to rethink its deal

Sydney, March 23: An $8.7 billion bid for Qantas Airways Ltd. (QAN.AX: Quote, Profile, Research), the world's biggest airline takeover, was in disarray on Friday after a key shareholder said it would vote against the offer, forcing the buyout group to rethink its deal
Shares in the Australian carrier slumped as much as 6 percent on fears the deal would collapse after fund manager Balanced Equity Management said it did not plan to accept the offer from a consortium led by Macquarie Bank (MBL.AX: Quote, Profile, Research).

While Balanced Equity holds about 4 percent of Qantas, analysts said there were now fears other shareholders would also reject the bid which needs the backing of 90 percent of shareholders to succeed.

The bid consortium, Airline Partners Australia, said in a statement it was considering a "range of alternatives" in response to Balanced Equity's decision. It cannot legally raise its offer.

The sale of the national icon, dubbed the flying kangaroo, has been backed by the Australian government despite some political and union opposition.

"About 60 percent of the stock is now held by hedge funds and other institutions and it's difficult to know what their intentions are," said Derek Sadubin, an analyst at the Center for Asia Pacific Aviation.

"This (rejection) would suggest that the momentum behind the offer is unwinding."

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