Some progress yesterday on three takeover situations, with Rebel Sport falling to buyout group, Archer Capital; Qantas producing qualified forecasts with the share price edging higher towards and an uncertain outcome; and the ANZ looks even further from winning its bid for E*Trade.
Gerry Harvey got his way with Rebel Sport shareholders narrowly approving the $4.60 a share offer from Archer Capital.
Shareholders voted 76.69 per cent of shares in favour of the scheme of arrangement at a meeting in Sydney yesterday, barely exceeding the 75 per cent approval needed for the bid to succeed.
Mr Harvey, who is Rebel Sport’s chairman and his company, Harvey Norman, the majority shareholder, was obviously glad the deal went through.
He has expressed surprise anyone would vote against it, as they obviously did, but a group of shareholders couldn’t muster enough votes to defeat the proposal.
Those shareholders were named as Perpetual, Paradice and Invesco and were said to hold a combined stake of 25 per cent. But obviously not quite 25 per cent in the end.
Archer Capital had said the offer was final and there would be no more money.A total of 51.4 million shares were voted in favour of the offer and 15.6 million against, but another 13 million shares abstained.
Rebel had accepted the $4.60 per share offer, valuing it at $369 million, last November.
Rebel shares traded at $4.25 each on Wednesday and after a trading halt was lifted yesterday, they bounded ahead 32c to $4.57.
Harvey Norman will receive around $180 million or so gross. HVN shares jumped 10c to $4.75, 2c away from its all time high of $4.77. HVN is valued at $4.922 billion.
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Meanwhile the $11.1 billion Qantas offer from Australian Airline Partners looks increasingly problematic after the airline bowed to pressure and produced highly qualified forecasts for the 2008 financial year.
The shares rose 8c to $5.12 on 42.4 million shares (more than 210 million shares since Monday).
The forecast was both an update and a slight upgrade, sort of.
The private equity bid has been in danger of failing because of the airline’s reluctance to provide investors (UBS Asset Management and Balanced Equity) with profit forecasts for the next financial year.
But the statement left as many unanswered questions about the future of the offer as there were before.
Qantas reported near record traffic figures for January and the first seven months of the year which were better than seen during the first half when the company reported a small rise in earnings but forecast a 30 to 40 per cent rise in full year profits.
Qantas said its result for the June 30, 2007 year was likely to be at the upper end of the range of previous guidance.
“Qantas today confirms that the full year result is likely to be towards the upper end of the range,” the company said in its statement.
“The expectation is based on continuing strong demand and yields offsetting cost reduction targets which have not been fully realised in the engineering and airport divisions.”
More controversially Qantas also said that its outlook for profit before tax (PBT) for the 2007-2008 financial year was “in line with market analysts’ consensus figure of about $1.23 billion”.
“In response to market speculation and queries received from investors, Qantas confirms its outlook expectations for 2008 are in line with average analyst consensus PBT estimates of approximately $1.23 billion,” Qantas said.
But that was qualified: the airline said it was yet to assess the impact of, or include any provision in its estimates, in relation to the recently-announced intention of Tiger Airways to begin services in Australia and Virgin Blue’s deployment of extra capacity through new aircraft, and plans for Qantas to secure more planes to meet the new competition.
Qantas also said that it was not able to quantify liabilities associated with the airline’s alleged price-fixing in the air cargo market and other contingent liabilities referred to in interim results released on February 8, 2007. “But it is possible that they may be significant,” Qantas said.
Analysts dismissed these concerns as being too hard to quantify and it appeared that the airline was trying to raise as many qualifications as possible.
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In Melbourne the takeover of E*Trade is getting messier and messier and the ANZ bank looks like going home without its bat.
The ANZ says it’s not interested in selling its E*Trade, if rival broker IWL Ltd proposes a takeover of the target.
That’s after IWL emerged with a less than five per cent of E*Trade.
That saw E*Trade shares jump 12 cents to $4.25 by after IWL revealed it had bought a strategic stake in the on-line broker.
ANZ is trying to get a $268 million offer for the rest of the shares in E*Trade it doesn’t already own but it has been frustrated by one large shareholder, Caledonian Investments, which has lifted its holding to 12 per cent or so and rejected the ANZ’s $4.05 a share offer.
IWL says its stake was below the substantial shareholding threshold, but was more than five per cent of its own asset base: that puts it in a high risk situation if the ANZ walks away and sits pat with its large minority stake of 34 per cent.
IWL said it does not presently intend to accept the recent $4.05 per E*Trade share cash offer by ANZ and is currently finalising its strategic options for its holding in E*Trade shares.”
“As part of this process, IWL is, amongst other things, considering the formulation of an alternative proposal(s) to that put forward by ANZ, which it believes could be of greater benefit to E*Trade Australia shareholders.”
The ANZ spokesman says its focus is on holding that stake and not in selling.
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And, finally is the funny $148 million ‘pa
