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Qantas Rejects Takeover Offer

The Australian airline, Qantas rejected a take over bid by a group of investors led by U.S. private equity firm, Texas Pacific Group, and Macquarie Bank, an Australian investment bank. The group offered to pay $8.6 billion for Qantas. In reaction to the decline by Qantas its shares lost 2.7% of its market value, although they have been 30% since speculation on the takeover initially began.

Qantas is interested in negotiating a takeover, since the company claims it is restrained in a market that doesn`t understand the company`s true value, as well as, limiting its sources for fundraising which it needs to fund its fleet and its expantion plans. But although the company is interested in a buyer the company announced that its board of directors deemed the current bid unacceptable. The investment group said it would announce any new development to the market as they happen and that it is considering its reply to Qantas` rejection.

The possible sale of the 86-yer-old Qantas, a national icon in Australia, often called the "flying kangaroo", has raised Australian national sentiment, which reached the highest echelons of Australian politics. For that reason the investment group promised to leave the company in Australian hands in any case. Prime Minister, John Howard and Minister of Finance, Peter Costello, said they will not intervene in the sale of Qantas, as long is the purchase bid hold up to Australian law, which limits foreign ownership of the company to 49%.