A new player in the Qantas stalemate?
The surprise substantial shareholding notice from the new player helped send the shares 6c higher to $5.15 on more than 30.4 million shares traded.
Deutsche Bank appeared as a substantial shareholder for the first time yesterday in Qantas, declaring it held 4.80 per cent directly and 3.60 per cent through derivatives.
It was a major move onto the register which started back in late November 2006 with the purchase of just 10,000 shares.
Now the German bank says it owns 95.216 million shares directly and 71.434 million through derivatives, for a total interest of 8.40 per cent, which makes it the third largest shareholder behind the bidding group, Airline Partners Australia, which had a 30.6 per cent stake on Monday but which wasn’t updated yesterday, a sign perhaps that acceptances had slowed.
Deutsche Bank’s notice indicates it holds the shares in its own right and for other parties.
These are believed to be hedge funds and other clients and the holding may decline as the derivative positions unwind.
It followed the notice from UBS which indicated that it now held a 10.40 per cent stake in Qantas, enough to block the $11.1 billion APA bid in its own right, without depending on Balanced Equity which said last Friday it would oppose the $5.45 offer.
That 10.4 per cent holding consists of around 6 per cent in UBS Asset Management, the blocking shareholder with the rest in other funds and accounts at the investment bank.
Investment bank, JP Morgan said in a note to clients earlier this week that a withdrawal by Airline Partners Australia would see Qantas to come under some selling pressure.
“However, we believe the recent improvement in Qantas’s operating environment limits potential downside to about 5 per cent [25c] of Qantas’s current share price.”
Other brokers noted that QAN shares had solid support in the $5 region, as we saw Monday and yesterday. The shares have actually rallied 16 or 17c from Monday’s low.
Brokers say that it seems unlikely that APA could get bank approval to accept a less than 90 per cent acceptance level.
It possibly could but the banks would insist on tighter, more traditional covenants and security which would increase the cost of loans substantially.
JP Morgan has a price target for Qantas of $5.68 a share at the moment and other brokers believe the QAN share price would settle closer to $5 than $4 after an initial sell off if APA walked.
The bid has been extended to April 20 and the appearance of Deutsche Bank seems to give new life to the QAN share price late yesterday in a market that fell in afternoon trading.
