Imagine the Senators doing their homework for the one-day inquiry into the $11.1 billion takeover of Qantas by a group of investors, and the airline’s existing management.
They will be working for nothing, the hearing is meaningless.
The Senate inquiry will have just one day on the 20th of this month to listen to all the gripes and other comments on the controversial bid.
The inquiry will be all a bit too late: the Qantas share price jumped to $5.32 yesterday with more than 38 million shares sold, so big shareholders are quitting their holdings to get their money within three days (less the dividend and the time value of money calculation) and then reinvest in the market in the wake of last week’s fall.
And, after the greenlight from the Federal Government the Senate inquiry will not only be a waste of time but also a very good example of the contempt Federal Treasurer Peter Costello feels for the Senate and inquiries by parliamentary committees.
A much better method would have been to hold the inquiry much earlier, or barring that, to delay any official decision until after the Senate Committee had reported, not that the Government would have taken any notice.
Australian Airline Partners would have grumbled but appeared at the Senate inquiry, said their bit, heard from the moaners and groaners (especially the unions who want something they don’t have now, a jobs guarantee), and everyone would have been sort of content.
Regardless of the grumbles and moans and the attempts by the unions to get that jobs guarantee (talk about trying it on!), shareholders are giving a pretty strong indication that they want to be rid of their Qantas holdings.
As of Tuesday night 235.91 million Qantas shares had been accepted into the offer, or 11.88 per cent. That will now accelerate.
That’s a figure the likes of UBS Asset Management could well heed as they try to work out whether a higher bid can be wrung out of APA.
UBS Asset Management has nine per cent and need another large holder to stand with them. If they do and frustrate the bid then they will have a lot to answer for because it is clear that an overwhelming majority of Qantas holders will end up wanting the bid to succeed.
I think in the end the UBS company won’t stand in the way.
Meanwhile the Federal Treasurer was out and about yesterday selling his Qantas decision as widely as possible.
He says the government has imposed conditions on the sale of Qantas to prevent the Macquarie Bank-led bid facing a conflict of interest over its ownership of Sydney airport, which on the face of it is a curious claim given that the ACCC gave the bid a clean bill of health last week and specifically mentioned the Macquarie problem and cleared it.
Mr Costello said the government had demanded clauses designed to avoid competition issues arising from Macquarie Bank’s ownership of Sydney airport and its stake in Qantas.
He said that the obligation is that where an issue arises for access in relation to Sydney airport … Macquarie will not vote on any specific decision relating to terminals, or other facilities at or access to Sydney airport.
According to the Treasurer, the thinking behind that is that Macquarie Bank, having a very strong material interest in Sydney airport and should not use its interest in Qantas to advance its interest in Sydney airport.
APA director Bob Mansfield urged shareholders to accept the deal.
“The cash offer represents a significant premium for shareholders and the binding undertakings given to the government guarantee that Qantas will remain majority Australian owned and controlled,” Mr Mansfield said.
“The only material positive condition to be satisfied is reaching 90 per cent acceptances,” he commented.
“To date, acceptances, including instructions held under the institutional acceptance facility, have been received for approximately 12 per cent of total shares on issue.
“It is particularly pleasing that more than 37 per cent of Qantas shareholders by number have already accepted the offer.”
The offer closes on April 3.
APA includes Macquarie Bank, Allco Finance Group and Allco Equity Partners, along with US private equity group Texas Pacific Group and Canada’s Onex Group.
They will hold the following stakes in a privatised Qantas: Allco Equity Partners with 27 per cent, Texas Pacific 25 per cent, Macquarie Bank less than 15 per cent, Allco Finance Group eight per cent, Onex 12.5 per cent, other foreign investors 11.5 per cent and Qantas management one per cent.
