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Qantas accepts Macquarie takeover Qantas accepts Macquarie takeover
(30 minutes later)
Australia's flagship airline Qantas has accepted an A$11.1bn ($8.7bn; £4.4bn) takeover bid led by Macquarie Bank. Australia's flagship carrier Qantas has accepted an A$11.1bn ($8.7bn; £4.4bn) offer for the company, making it the world's biggest airline takeover.
The board unanimously recommended shareholders accept A$5.60 a share, 33% higher than a month ago when takeover speculation began. The Qantas board unanimously recommended that shareholders accept A$5.60 a share from a private equity consortium including Macquarie Bank.
Qantas rejected an offer of A$5.50 a share on Tuesday, with unions fearing thousands of job losses. Thursday's move comes after the airline rejected an initial A$5.50 offer earlier in the week.
"I think we've done a very good job for the shareholders," said Qantas chairwoman Margaret Jackson. Qantas chairman Margaret Jackson said it was a "momentous day" for the firm.
Qantas shares ended Thursday trading up 3.73% to A$5.28 following the announcement. Shares in the airline ended Thursday trading up 3.73% to A$5.28 following the announcement.
Stake share Foreign limits
Current ownership laws mean that no investor can own more than 25% of the firm's shares while no foreign company can hold a majority stake. In addition to Macquarie Bank, Australia's largest investment bank, the Airline Partners Australia takeover consortium also includes Australian finance company Allco, US firm Texas Pacific Group, and Canada's Onex.
In the consortium Airline Partners' Australia, Macquarie will own about 15%, with Australian finance company Allco being the largest shareholder, through several subsidiaries. I hope that the Qantas we know is the Qantas we keep Australian PM John Howard
Texas Pacific Group will hold less than 15%, with Canada's Onex Corp owning 9%, and other foreign investors taking another 15%. The deal has been structured so that it meets Australian rules which limit foreign ownership of Qantas to 49%, with each foreign business only allowed a 25% share.
The new owners will not break up the airline, hive off maintenance overseas or cut regional routes, said a spokesman for the consortium, in a bid to reassure unions. Allco's stake in the consortium is 46%, while Macquarie and Texas Pacific both have 15%, Onex 9% and other unnamed foreign investors also 15%.
Despite suffering from the steep increase in fuel prices in recent years, Qantas remains one of the few global carriers to turn a profit. The takeover still needs approval by Australian regulators and Qantas shareholders, but the consortium has already pledged not to cut services.
"Qantas will retain the current Australian management and their growth strategy, a strategy that does not involve a break up of the airline, cuts to regional services, or the movement of maintenance operations overseas," said Airlines Partners Australia director Bob Mansfield.
Despite suffering from the steep increase in fuel prices in recent years, Qantas remains one of the few global carriers to make a profit.
Australian Prime Minister John Howard said he wanted the airline to maintain its traditional character.
"I hope that the Qantas we know is the Qantas we keep," he said.
"People like Qantas, it is an icon."
The takeover consortium plans to de-list the airline and take it private.